Airlines grapple with impact of Mideast war

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Global airlines are grappling with the effects of the war in the Middle East, as fuel prices soar and customers reassess their travel plans, AFP reports.

The average global price of jet fuel has surged, reaching $173.91 per barrel, according to the Platts benchmark index.

While the region’s airlines such as Qatar Airways, Emirates and Etihad have been hit the hardest, most major international carriers have been affected, as they operate flights both to and through the Gulf region.

European airlines will be able to withstand the shock in the short term as many purchase fuel at fixed prices for several months in advance. Air France-KLM, for its part, said in February that it had secured a fixed price for 70 per cent of its fuel for the first two quarters, and 60pc for the quarter following.

Budget airline Ryanair is also well protected because of a similar strategy, according to a report by Bernstein analysts published Tuesday.

The Bernstein report said that the trio of the largest US carriers — United, Delta, and American — “do not hedge”, which could weaken them on North Atlantic routes where competition with European airlines is fierce.

If oil prices remain high, airlines will have no choice but to pass on the price increases to customers, analysts say.

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