Iran War Disrupts Summer Travel: Higher Airfare and Flight Cuts Loom

If you’re planning a summer getaway, be prepared for some turbulence before you even leave the ground. The ongoing war in Iran is having a direct impact on the travel industry, leading to higher flight prices, unexpected schedule changes, and fewer available routes. Soaring jet fuel costs are the primary driver, forcing airlines to pass expenses on to travelers and make difficult operational decisions.

Rising Travel Costs and Service Cuts

The most immediate impact for most travelers is on their wallets. Airfare is already up a notable 15% compared to this time last year, a direct result of jet fuel prices that have roughly doubled since the conflict began. The continued closure of the Strait of Hormuz, a critical channel for the global oil market, is a major factor keeping fuel costs high.

Airlines are responding to these pressures in several ways. You may have already noticed that most major U.S. carriers—including Alaska, Delta, United, American, Southwest, and JetBlue—have recently increased their checked baggage fees. Beyond fees, some are cutting service altogether. Air Canada, for example, has canceled its flights to New York's JFK airport from June through October, citing the unsustainable cost of fuel for the decision.

Looming Jet Fuel Shortages in Europe

While U.S. travelers are primarily feeling the pinch of higher prices, the situation in Europe is becoming more serious. According to the International Energy Agency, some European nations now have less than 20 days of jet fuel supply coverage. To put that in perspective, supplies haven't dipped below 29 days since 2020.

Experts warn that if those supplies fall below the 23-day mark, physical fuel shortages could begin to appear at some airports, potentially causing widespread cancellations and even higher fares. Jacques Rousseau, an analyst at Clearview Energy Partners, notes that while the U.S. is less likely to face physical shortages, travelers will still be affected. "It’s just going to cost more here," he says, "whereas in different parts of the world you could actually get to a point where there’s just no fuel." Some airlines are better insulated than others; Delta Air Lines, which owns its own refinery, stated it doesn’t anticipate any "near-term impact to our operations."

Spirit Airlines Faces Potential Liquidation

The extreme pressure of high fuel costs is putting some airlines in a precarious position. Budget carrier Spirit Airlines is reportedly exploring the possibility of liquidating its assets. The airline's plan to emerge from bankruptcy was formulated before the war sent fuel costs skyrocketing, threatening the viability of its recovery.

While Spirit has stated it does not "comment on market rumors and speculation" and that its operations "continue as normal," the situation highlights a critical risk for consumers. If an airline is forced to liquidate, customers holding tickets for future flights are often among the last in line to receive a refund, after secured creditors and other parties are paid.

What Travelers Should Expect

This summer is shaping up to be a challenging season for air travel. Christopher Anderson, a professor at Cornell University, predicts travelers will face a market with "later booking patterns, more schedule volatility and fewer low-fare options."

Given the uncertainty, here’s how you can prepare:

• Book with a credit card. This is your best line of defense. If an airline cancels your flight or ceases operations entirely, you can dispute the charge with your credit card issuer to get your money back.
• Consider travel insurance. Some policies offer coverage if an airline goes out of business, but be sure to read the fine print to understand exactly what is and isn't covered.
• Monitor your flight status. With schedules more volatile than usual, check your booking frequently for any changes or cancellations so you can react quickly.