Could protracted Hormuz crisis end the era of cheap long-haul air travel?

LONDON: The crisis in the Strait of Hormuz has turned something as mundane as jet fuel into aviation’s biggest strategic vulnerability, sending costs soaring, scrambling flight plans and raising uncomfortable questions about whether the era of cheap, plentiful long-haul travel is over.

What began as a limited military strike on Iran has morphed into a global supply shock rippling through airlines’ balance sheets, airport fuel tanks and holidaymakers’ plans from London to Lagos to Lahore.

At the heart of the turmoil is a simple geography lesson.

The narrow waterway between Iran and the Arabian Peninsula normally carries around a fifth of the world’s seaborne oil, including crude headed to Asian and European refineries and large volumes of refined jet fuel exported directly from Gulf plants.

Since Iran’s war with the US and Israel escalated and tanker traffic through Hormuz slowed to a trickle, both the raw material and the finished product have been squeezed at the same time — a double choke that has left aviation dangerously exposed.

The result has been a price shock sharper than anything seen in years. According to IATA, benchmark jet fuel prices have roughly doubled since early February, rising far faster than crude as traders price in prolonged shortages of aviation-grade kerosene.

In Asia, spot prices in Singapore surged more than 70 percent to above $220 a barrel at one point, while European jet fuel has climbed to historic levels.

The shock initially appeared so severe that the head of the International Energy Agency warned in mid-April that, if disruptions through Hormuz persist, Europe could be just “six weeks or so” away from serious shortages at its airports.

That worst-case scenario has so far been avoided, helped by rapid diversification and policy action, but the episode has forced refiners and traders to redraw trade maps to keep aviation moving.

“It really does come down to who is shortest and most willing to pay,” Sparta Commodities analyst James Noel-Beswick told Reuters last week.

The flexibility of global fuel supply chains is clear enough. But so are their limits.

Despite IATA figures showing that global air passenger traffic fell 3.4 percent year on year in April, global jet fuel demand is still expected to average 7.77 million barrels per day this year, according to the IEA — little changed from 2025.

Fuel is already the single biggest cost for most airlines, often accounting for 25 to 30 percent of operating expenses in normal times and much more for carriers in fuel-dependent regions such as Africa.

When that bill surges, airlines have only a handful of levers: raise fares, add surcharges, cut capacity or lean on hedging deals to soften the blow.

So far, they are using all of them.

Major carriers in Europe, Asia and the Middle East have trimmed summer schedules, cut marginal frequencies and parked aircraft to preserve fuel for their most profitable routes.

Others are redesigning flight paths around volatile airspace, especially on long-haul corridors linking Europe, Asia and Australia that once relied on efficient routings over the Middle East.

Gulf hubs — built on cheap fuel and their location at the crossroads of east and west — are feeling the strain acutely.

Disruptions and missile threats around key airports in the UAE and Qatar forced mass cancellations and diversions in the early weeks of the conflict, undercutting the connectivity that made Abu Dhabi, Dubai and Doha global transit points.

According to IATA, the conflict caused a 46.6 percent drop in demand for carriers in the affected region.

Further west, African carriers that import much of their jet fuel via Hormuz face an even harsher equation, with some reporting price rises of 70 percent or more at coastal airports and warning that higher costs could force reductions in regional routes.

Morocco’s state-owned carrier Royal Air Maroc said last week it would temporarily suspend several routes to African and European destinations because of rising jet fuel prices, elevated operating costs and weak demand.

Financial responses have been just as dramatic as operational ones. Some airlines that hedge their fuel needs — typically in Europe and parts of Asia — have been insulated from the full force of the spike, at least for now.

But hedging is far from universal, and many carriers have warned that costs could deteriorate further after the summer, with passengers already feeling the squeeze.

Long‑haul economy tickets on some Europe-Asia and Europe-Australia routes have risen by double‑digit percentages compared with last year, with analysts expecting average global fares to climb further if current fuel prices persist.

IAG, the parent of British Airways and Iberia, said in April it would make “some pricing adjustments” to reflect higher fuel costs, though it stopped short of calling them a surcharge.

“The headline ‘fares are going up’ conceals the real mechanism,” Jose Ramon Bauza, CEO of JRB Global Consulting Advisory, told Arab News.

“Airlines are using fuel surcharges — the YQ line on the ticket — as a pressure valve. The base fare remains competitive on search engines while the real increase appears later,” he added, noting that surcharges already exceed $1,000 on some business class routes.

“The asymmetry is structural. Surcharges rise quickly and rarely fall back.”

Introduced as a “temporary” measure in 2004, surcharges became rarer as passengers demanded more transparency. But these “junk fees” are returning to booking pages, often buried in small print or added late in the purchase process.

At the same time, nervousness about flying through a conflict-adjacent region has led many Europeans to delay holiday bookings or shift to closer-to-home destinations, prompting some airlines to discount selectively to keep planes full while quietly cutting capacity elsewhere.

“The key behavioural shift is not that people stop flying, but that they postpone trips, reduce frequency and shorten stays,” said Bauza.

“Counterintuitively, capacity reductions are affecting short-haul more than long-haul,” with adjustment being absorbed by rail where possible.

“Airlines protect long-haul routes because they generate higher margins per liter consumed. 

“What is changing is the composition of demand: high-net-worth travellers continue flying, while lower-middle segments look for Mediterranean or Southeast Asian destinations perceived as more stable and affordable.

“Demand is redistributing rather than disappearing.”

For tourism-dependent economies, particularly in the Middle East and East Africa, the stakes are higher than a pricier ticket.

The World Travel and Tourism Council estimates that the Iran conflict is already costing the global travel and tourism industry around $600 million a day in lost spending, with a significant share of that pain concentrated in the region.

Oxford Economics projects that tens of millions of trips to and from the Middle East could be at risk this year if higher fares, reduced connectivity and security concerns persist.

“The impact is structural. For destinations such as the Maldives, Seychelles or Mauritius, aviation is not simply transport — it is the backbone of the economy,” said Bauza.

“In East Africa, where much of aviation fuel transits through Hormuz, connectivity itself becomes vulnerable if smaller operators fail.

“For the Gulf, the challenge is dual: weaker transit traffic and softer tourism demand precisely when Dubai, Riyadh and Abu Dhabi are investing heavily in long-term tourism infrastructure.”

The longer the shock lasts, the more it begins to look like a turning point rather than a passing squall.

Even if tanker traffic through Hormuz normalizes in the coming months, rebuilding stocks, rebalancing refining runs and restoring confidence will take time, especially in Europe and parts of Asia that now rely heavily on Gulf fuel.

The crisis has exposed how concentrated aviation’s energy lifelines have become — and how little redundancy exists when one chokepoint is compromised.

“More than the end of cheap long-haul travel, this crisis exposes the vulnerability of the Gulf hub model,” said Bauza, who expects secondary hubs such as Istanbul, Nairobi or Kuala Lumpur to strengthen their role as strategic redundancies.

Airlines and regulators are already talking about diversifying fuel supplies, building strategic jet fuel reserves and rethinking network design so fewer routes hinge on a single corridor or hub.

For Gulf carriers whose business model is built on funnelling global traffic through mega-hubs a short distance from Hormuz, that poses difficult questions about resilience and risk.

“It would be a mistake to underestimate the Gulf’s resilience,” said Bauza, pointing to regional airlines’ deep pockets and the region’s low energy costs. “If Hormuz normalizes, the Gulf is unlikely merely to recover; it may consolidate its position further.”

Half a century after the first oil shocks reshaped the global economy, the Hormuz crisis is forcing aviation to confront its own energy dependence in a sharper, more immediate way.

What is emerging is not merely another spike in the cost of doing business, but a stress test of a system that has long taken cheap fuel and open airspace for granted.

“Aviation today is not just transport; it is strategic infrastructure that shapes trade, investment, tourism and geopolitical relevance,” said Bauza.

“This is not the end of global travel. But it may well mark the end of an era in which connectivity was assumed to be permanently cheap, abundant and geopolitically insulated.”