Europe's airline leaders delivered a clear message at today's Airlines for Europe (A4E) Summit in Brussels: rising jet fuel costs will inevitably push airfares higher, and travellers should book soon to secure better rates.

The cost of jet fuel and its impact on ticket prices dominated interviews, keynote speeches, and panel discussions as industry executives grappled with ongoing geopolitical tensions affecting global fuel markets.

Industry Leaders Sound the Alarm

Michael O'Leary, CEO of Ryanair, addressed the situation bluntly: "If the Strait of Hormuz remains closed, oil prices will remain elevated, and I think that inevitably will flow through to higher fares."

However, O'Leary doesn't anticipate supply disruptions or flight cancellations: "It is very difficult to see the U.S. and Israel keeping up this level of attrition beyond another five or six weeks."

Carsten Spohr, CEO of Deutsche Lufthansa AG, highlighted the financial pressure airlines face. "The average profit in my company is about 10 euros per passenger," Spohr told reporters, emphasizing that airlines have limited capacity to absorb extra fuel costs without mitigation strategies.

IATA Director General Willie Walsh warned that the situation creates "no winners," telling Reuters: "It's going to impact everybody. There's jet fuel produced in the Middle East that goes into North America, there's jet fuel that goes into Asia."

While air travel demand remains robust, Walsh cautioned that ongoing conflict and escalating fuel costs could ultimately force carriers to reduce capacity.

North American Airlines Report Strong Bookings Despite Cost Pressures

Major U.S. carriers report they're weathering the fuel cost storm better than initially feared, with strong ticket sales helping offset expenses running into hundreds of millions of dollars.

Executives from Delta, American, and United told investors earlier this week that all three carriers are experiencing record bookings this year. Their comments suggest travelers are proactively purchasing tickets now to lock in current rates before airlines implement further price adjustments ahead of the summer travel season.

Early Fare Increases Already Underway

Several carriers have already moved to adjust pricing:

Air New Zealand, SAS, and Qantas were among the first to announce fare hikes in response to rising fuel costs.

Air Canada

Spokesman Peter Fitzpatrick noted that "all airlines are subject to the current volatility" and that booking prices change constantly—partly in response to market fluctuations. Air Canada's fuel expenditure exceeded $5.1 billion in 2024, representing 24% of the carrier's operating costs and its single largest expense category.

WestJet

Spokeswoman Julia Kaiser acknowledged immediate impacts: “The recent sharp increase due to the situation in Iran has already made operating flights more expensive. Based on this, it's likely further pricing adjustments may be needed.”

Air Transat

The carrier has already implemented higher fuel surcharges for European flights as jet fuel prices climb.

"What we're also doing is currently raising fares on peak travel dates and routes where we see less competition," Transat A.T. Inc. CEO Annick Guérard told analysts during a conference call.

What This Means for Travellers

The consistent message from airline executives across continents is clear: current booking rates likely represent better value than what travellers will encounter in the coming weeks and months.

With fuel representing airlines' largest operating expense—often 20-25% of total costs—and profit margins measured in single-digit euros or dollars per passenger, carriers have limited ability to absorb price shocks without passing costs to consumers.

For travellers planning summer or fall trips, the industry consensus suggests booking sooner rather than later may yield significant savings before additional fare adjustments take effect.a