Spain's Industry and Tourism Minister, Jordi Hereu, has urged holidaymakers to book airline tickets promptly to avoid anticipated fare increases driven by escalating oil prices. The surge, fuelled by the conflict in Iran, threatens to drive up travel costs significantly.
Record Tourism at Risk
Spain celebrated a record 97 million tourists last year, a 3.5 per cent increase on 2024 figures. However, Mr Hereu warned that this impressive growth could be jeopardised by the looming threat of pricier flights. Speaking to Spanish newspaper Expansion on Monday, he recommended that people purchase tickets now, noting that airlines are currently using kerosene purchased some time ago, leading to price fluctuations.
"It's already clear that prices have risen and this could affect demand," he said, adding that Spanish and European authorities are taking measures to prevent fuel shortages.
Oil Price Surge
Disruption to global oil supplies has pushed prices up by around 50 per cent since the U.S. and Israel launched strikes on Iran on February 28. Rising oil prices have added more than $100 to the price of long-haul flights from Europe, a cost likely to trigger higher ticket prices, according to campaign group Transport & Environment last week.
Hereu noted that Spain, the euro zone's fourth largest economy, has a larger stock of kerosene and higher production capacity than other countries. However, he warned: "If the countries that send tourists to Spain had problems, we would have them too."
Airline Responses to Fuel Cost Surge
A surge in jet fuel prices, driven by the U.S.-Israeli war on Iran, has upended the global aviation industry. Jet fuel prices have soared from $85-$90 per barrel to $150-$200 per barrel in recent weeks, a financial hit for an industry where fuel accounts for up to a quarter of operating expenses. Airlines worldwide are responding with fare increases, capacity cuts, and revised financial outlooks.
Major Airlines' Actions
- Aegean Airlines: Expects suspended Middle East flights and fuel price spike to have a "notable impact" on first-quarter results.
- AirAsia X: Cut 10% of flights and imposed about 20% fuel surcharge.
- Air Canada: Trimming four daily flights to New York from June to October.
- Air France-KLM: Increasing long-haul ticket prices by 50 euros per round trip; KLM cancelling 160 flights in Europe.
- Air India: Revising fuel surcharge to a distance-based grid.
- Air New Zealand: Slashing flights through May and June and hiking fares.
- Air Transat: Reducing capacity by 6% from May to October.
- Akasa Air: Introducing fuel surcharge of 199 to 1,300 Indian rupees.
- Alaska Air: Withdrew profit forecast and trimmed capacity.
- American Airlines: Slashed 2026 profit forecast, hiked baggage fees.
- Asiana Airlines: Slashing 22 flights between April and July.
- Cebu Air: Reviewing pricing and network strategies.
- China Eastern Airlines: Raising fuel surcharges for domestic flights.
- Delta Air Lines: Cutting capacity by 3.5 percentage points, raising baggage fees.
- EasyJet: Warning of larger half-year pre-tax loss.
- Frontier Airlines: Pitched $2.5 billion relief plan to U.S. government.
- Greater Bay Airlines: Raising fuel surcharges on most routes.
- Hong Kong Airlines: Raising fuel surcharges by up to 35%.
- IAG: Raising ticket prices to reflect higher fuel costs.
- IndiGo: Introducing fuel charges on domestic and international flights.
- JetBlue Airways: Entered $500 million debt financing agreement; will not consider bankruptcy.
- Korean Air: Entering emergency management mode from April.
- Lufthansa: Unveiled new low-cost fare option; removing 20,000 short-haul flights.
- Pakistan International Airlines: Raising domestic fares by $20 and international by up to $100.
- Qantas Airways: Delayed buyback, raised fuel bill estimate.
- SAS: Cancelling 1,000 flights in April due to high fuel prices.
- Spirit Airlines: Asked for emergency funding from Trump administration.
- Spring Airlines: Raising fuel surcharges on domestic flights.
- Southwest Airlines: Forecast lower profit, hiked baggage fees.
- TAP: Implementing price hikes to mitigate fuel cost impact.
- Thai Airways: Raising fares by 10% to 15%.
- TUI: Cut profit outlook, suspended revenue guidance.
- Turkish Airlines / SunExpress: Imposing temporary fuel surcharge of 10 euros per passenger.
- T'way Air: Furloughing some cabin crew without pay.
- United Airlines: CEO says ticket prices may need to rise 15-20%; instated fare increases.
- VietJet: Adjusted flight frequency due to potential fuel shortages.
- Vietnam Airlines: Cancelling 23 flights per week; seeking government assistance.
- Virgin Atlantic: Adding fuel surcharges but struggling to return to profitability.
- Virgin Australia: Expects A$30-40 million increase in fuel costs; reducing capacity by 1%.
- Volotea: Introduced pricing policy linking tickets to fuel costs, with potential post-purchase surcharge.
- WestJet: Cut seat capacity for June; adding C$60 fuel surcharge.
