Vox
June 3, 2026
How Middle East Conflict Could End Affordable Air Travel
TL;DR
The war in Iran and closure of the Strait of Hormuz have driven jet fuel prices to 4-year highs, threatening affordable air travel as airlines raise fares, low-cost carriers collapse, and competition diminishes.
Key Takeaways
- 1Jet fuel prices have reached 4-year highs due to 20% of global oil supply being choked off by the Strait of Hormuz closure, costing the airline industry an estimated $15 billion
- 2Low-cost carriers like Spirit Airlines lack resources to absorb fuel costs and are collapsing, reducing competition and causing fares to rise on their former routes
- 3Major airlines are using fuel costs as justification to raise ticket prices 20% or more, with CEOs indicating these increases may not come down even after the conflict ends
- 4European airlines face additional pressure from a potential fuel shortage, with only weeks of reserves available if the Strait of Hormuz remains closed
- 5Decades of affordable air travel may end if prices remain elevated, potentially pricing out lower-income travelers and fundamentally changing aviation accessibility
Notable Quotes
“Airlines who struggle to make money in the best of times potentially see this as an opportunity to raise prices, obviously in the name of higher fuel costs, but to keep those prices higher for longer, maybe even never bringing them back down.”
“We are absorbing probably 50% of the cost on our own, and probably about 50% will go into pricing.”
— CEO Scott Kirby
“In Europe, we have maybe 6 weeks or so jet fuel left. If we are not able to open the Strait of Hormuz.”
— Head of the International Energy Agency
“I don't think that they're going to bring down fares. I think they're 100% going to ride the wave, bank on the fact that people are going to accept that this is the new norm.”
Chapters
1. Fuel Crisis and Cost Impact
Jet fuel prices have reached 4-year highs due to the Strait of Hormuz closure, reducing global oil supply by 20% and costing the airline industry an estimated $15 billion. Fuel accounts for approximately 25% of airline operating costs.
2. Airlines Pass Costs to Consumers
Airlines are raising ticket prices by at least 20%, increasing bag fees, and cutting unprofitable routes. Major carriers absorb about 50% of fuel costs internally while passing the remaining 50% to consumers through higher fares.
3. Differential Impact on Airlines
Large carriers like Delta, United, and American can offset costs through premium offerings and loyalty programs, while low-cost airlines lack these resources. Spirit Airlines' May 2026 closure exemplifies the vulnerability of budget carriers to fuel price shocks.
4. Market Competition and Ripple Effects
When low-cost carriers exit the market, fares rise on their former routes due to reduced competition. The collapse of budget airlines triggers industry-wide consolidation and increased prices across the board.
5. European Fuel Shortage Crisis
Europe faces a potential jet fuel shortage with only 6 weeks of supply remaining if the Strait of Hormuz stays closed. Emergency reserves and fuel imports provide temporary relief through August, but long-term solutions remain uncertain.
6. Long-Term Industry Changes
If the conflict continues, the aviation industry could face a full-blown crisis with widespread bankruptcies, consolidation, job losses, and reduced service. Even if the war ends, fuel prices and fares may take months or years to stabilize.
7. Affordability and Accessibility Crisis
Decades of increasingly affordable air travel may end as ticket prices climb, potentially pricing out lower-income travelers permanently. The fundamental question emerges: is air travel a transportation necessity or a luxury privilege?
Key People & Entities
- Scott Kirby
- CEO addressing fuel cost impacts and necessary ticket price increases
- Delta, United, American Airlines
- Major carriers with premium offerings enabling them to absorb fuel costs better than low-cost competitors
- Spirit Airlines
- Low-cost carrier that collapsed in May 2026, unable to sustain operations amid rising fuel costs
- International Energy Agency
- Organization that warned of European jet fuel shortage in April due to Strait of Hormuz closure
Glossary
- Strait of Hormuz
- A critical sea passage between Iran and Oman through which approximately 20% of global oil supply flows; closure disrupts worldwide energy markets
- Low-cost carriers
- Airlines that operate with minimal overhead and lower fares, such as Spirit Airlines, lacking the premium services and revenue streams of major carriers
- Airline Deregulation Act (1978)
- U.S. legislation that removed government control over airline routes and pricing, leading to the emergence of low-cost carriers and more affordable air travel
- Premium offerings
- Higher-margin airline services including business class, first class, and premium economy seating that generate disproportionate profits
- Loyalty programs
- Airline credit cards and frequent flyer programs that generate recurring revenue from customer sign-ups and transactions