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European airlines cut prices to revive demand
European carriers are reducing ticket prices in the short term to encourage travelers hesitant about the economic impact of the US-Israel conflict with Iran, Wizz Air's CEO József Váradi stated on Tuesday.
Fuel costs surge but hedging softens blow
Jet fuel prices in Europe have soared since late February, when US and Israeli strikes on Iran began. Prices jumped from $831 per metric tonne to a peak of $1,800 before stabilizing around $1,500-still nearly double pre-conflict levels.
Europe relies heavily on jet fuel imports, with over half typically sourced from the Gulf region. However, the Strait of Hormuz has been effectively closed for eight weeks, disrupting supplies and sparking fears of summer shortages.
Supply risks and industry reactions
Váradi dismissed concerns about widespread fuel shortages but warned of potential chaos if supplies dwindle unevenly. "If there's no fuel anywhere, flights will have to be canceled," he said, though he noted tankers are rerouting to the US for alternative supplies.
While European short-haul airlines, which hedge fuel purchases, can temporarily lower fares to stimulate demand, long-haul carriers-particularly US-based ones-are raising prices due to unhedged costs.
"People don't know what's going to happen. Is this leading to a bigger energy crisis? Will I lose my job? Inflation is already high-can I even afford to fill my car?"
József Váradi, Wizz Air CEO
Government and industry advice
Spain's Industry and Tourism Minister Jordi Hereu urged travelers to book flights early to avoid future price hikes. "Airlines are currently using pre-purchased fuel, but prices will rise as new, costlier supplies are needed," he told Expansión.
Mark Tanzer, CEO of the UK's travel agents association, reassured customers that no immediate fuel supply disruptions are expected, citing ongoing coordination with airline bodies.
Long-term outlook remains uncertain
Váradi predicted jet fuel prices would stay elevated for "a considerable period"-potentially 9 to 18 months-even if the conflict ends soon. "This isn't going away quickly," he said.
