Sky-High Airfares Become 'New Normal' As Jet Fuel Crisis Reshapes Travel

With the US-Iran conflict showing no signs of resolution, fuel prices continue to surge. Motorists are feeling the pinch, and airlines are also being forced to raise air fares and scrap some flights as operating costs climb.

As a result, a new normal is taking shape when it comes to travelling. The rising cost of airfare is pushing some travellers to scale back their plans. While higher-income passengers may absorb the increases, middle- and lower-income travellers are increasingly holding off on long-haul or leisure trips due to soaring costs.

Managing Aviation Industry Amid Oil Crisis

The UK government is attempting to manage the situation as best it can. Energy minister Michael Shanks said authorities are closely monitoring developments and coordinating with airlines, airports and fuel suppliers as tensions in the Middle East continue to impact supply chains, according to The Guardian.

In an exclusive interview, Dr Diane Merians Penaloza, a doctoral lecturer of business at the City University of New York's School of Professional Studies, provided insight into the situation. She believes the strain on jet fuel supply is already significant, particularly in Europe.

'Jet fuel shortage in Europe and in the US is pretty severe,' Penaloza said. 'It's actually more severe in Europe than it is in the US. They're having significantly more issues, to the extent that airlines have started slashing flights.'

Several major carriers are already responding. United Airlines has indicated that fares could rise by as much as 20%, while Lufthansa has warned of potential large-scale cancellations to offset rising fuel costs.

Penaloza explained that multiple pressures are unfolding at once, compounding the situation.

'There are several streams occurring simultaneously,' she said, pointing to disruptions in key energy routes such as the Strait of Hormuz as a major concern affecting global supply.

UAE Policy Shifts, OPEC+ Dynamics Also in Focus

Beyond immediate supply disruptions, broader geopolitical and production dynamics are also influencing prices. Recent developments involving the OPEC and OPEC+ have added further uncertainty to global oil markets, particularly following signals from the United Arab Emirates about adjusting its long-term production strategy.

For Penaloza, these developments are another factor weighing heavily on Europe, where reliance on external energy supplies remains higher than in the United States.

'The UAE's position, combined with current supply pressures, is contributing to rising prices,' she said. 'We're looking at oil levels around $126 (£92.39) a barrel, and there are few signs of that slowing down right now.'

She added that Europe faces additional challenges due to pricing pressures and structural differences in its airline industry.

'The issue for Europe is that its reliance on OPEC is stronger than the US's,' Penaloza explained. 'They're having a harder time managing pricing and flight capacity.'

Preparing for the New Normal

Looking ahead, hopes remain that tensions in the Middle East will ease and stabilise energy markets. However, Penaloza cautioned that a full return to previous price levels is unlikely in the near term.

'Costs will continue to increase incrementally,' she said. 'Once prices reach a level consumers are willing to pay, companies tend to hold them there. That effectively becomes the new baseline.'

She believes that while conditions may eventually improve, any meaningful correction could take years.

'I don't think prices are going to get better in the near term,' Penaloza added. 'We're probably four or five years away from a significant price shift.'

For now, travellers and airlines alike are being forced to adjust. Reduced travel, higher fares and operational changes are already reshaping how people plan trips and how airlines manage routes and capacity. The industry is adapting to what is becoming a prolonged period of elevated costs—one that many now recognise as the new normal.