The global travel industry, already strained by ongoing US-Israel-Iran tensions, faces renewed turmoil after US President Donald Trump declared the ceasefire with Iran over and warned of imminent further attacks. Benchmark crude oil prices surged 4.84% on Wednesday, driving up fuel costs.
The slowdown was evident even before the latest escalation. During the July 4 holiday weekend, 7.3 million people passed through US airport security checkpoints, down 2.3% year-on-year. A joint NPR, PBS News, and Marist College poll found 45% of Americans are skipping summer vacations due to high airfare and fuel costs, a 2% increase from last year.
Airlines are passing higher fuel costs to consumers. United Airlines announced in April it would raise fares by up to 20%, while American Airlines cut select routes for August and September. Budget carrier Spirit Airlines ceased operations in May, citing “geopolitical conflicts” as fuel costs rose.
European carriers are also struggling. Lufthansa grounded 200,000 short-haul flights in April, and British Airways raised fares by 8% to offset fuel costs. Airspace restrictions over Russia, Iran, Iraq, and Lebanon force European airlines to take longer routes, increasing fuel consumption.
Asian carriers face fewer restrictions. Singapore Airlines reported a 93.5% load factor on European flights in March. However, Middle Eastern routes remain uncertain. London-based businessman Rich Pleeth chose a Chinese airline for a trip to China to fly through Russian airspace, avoiding British Airways.
US road travel remains expensive. Average gasoline prices stand at $3.79 per gallon, down from a May peak of $4.48 but well above the $2.98 on February 28. Global prices per liter: Canada $1.32, Netherlands $2.52, UK $2.00, China $1.13, India $1.14.
Analysts warn the conflict may persist. Ryan Sweet, chief global economist at Oxford Economics, noted the ceasefire was fragile and further flare-ups are inevitable. This continues to pressure global oil markets and the travel industry.
Source: www.aljazeera.com