Airlines Levy War-Related Price Hikes Ahead of Summer Travel Season

Airlines have begun increasing fares and adding baggage fees as fuel prices soar.

As The Wall Street Journal (WSJ) reported Tuesday (March 31), this trend began in Europe and Asia and has since moved to the U.S., as the war in Iran ramps up the cost of fuel.

United Airlines CEO Scott Kirby has warned that fares could jump by as much as 20% due to war-related fuel scarcity, the report said.

“The reality is, jet fuel prices have more than doubled in the last three weeks,” Kirby wrote last month in a letter to employees. He said the airline has factored in the notion of oil prices climbing to $175 a barrel.

“If prices stayed at this level, it would mean an extra $11 billion in annual expense just for jet fuel. For perspective, in United’s best year ever, we made less than $5 billion,” Kirby said.

United has also cut the number of flights it had planned for the summer season, while other airlines are weighing the idea of canceling flights that don’t bring in enough revenue to cover fuel costs, the WSJ added.

These moves are shaping consumers’ summer travel plans, the report said, citing the example of Detroit resident Andrew Kirkegaard. He’d been planning to travel with his wife to Madrid in June before the cost of the $700 tickets nearly tripled. Now, he’s weighing the idea of traveling to Toronto to purchase a cheaper ticket to Europe.

“It’s obviously a pain because I have to go through customs twice each way,” he said. “But I mean, we’re saving 1,500 bucks, so it’s worth it.”

The changes are also happening as many Americans are struggling with basic expenses, to say nothing of paying for overseas flights. In fact, research by PYMNTS Intelligence finds that half of all surveyed consumers say they are struggling to stay on top of the daily cost of living.

Of those consumers, 84% said that groceries and household essentials are the chief problem, meaning 42% of all Americans are having trouble managing the cost of groceries.

But as covered here this week, the research also shows that different generations are responding to these pressures in different ways. Older consumers are tightening household budgets and prioritizing essentials, while younger age groups were much more likely to lean on family support, but also to report trouble with debt, rising credit card bills, work and income stability, and transportation costs.

“For younger consumers, the challenge is not just paying more. It is managing more moving parts at once,” the report said.