New Delhi: The global aviation industry is facing a new challenge with the strong increase in the price of jet fuel as a result of tensions linked to the conflict involving Iran.
Jet fuel, which is one of the biggest expenses for airlines, has become much more expensive in recent weeks. The rise is primarily associated with the soaring prices of crude oil and concerns about disruptions to oil supply in the Middle East.
The region is a significant area in the world’s production and transportation of oil. Where there are conflicts or military tensions there, energy markets react rapidly.
Many airlines are now concerned about the effect of increasing fuel costs. Fuel can be responsible for almost 30 to 40 percent of an airline’s overall operating costs. When prices rise out of the blue, airlines may find it hard to sustain their profits.
Some aviation companies may contemplate raising the price of tickets as the cost of fuel keeps rising. This means that passengers may need to pay more for flights in the coming months.
Airlines in Asia and Europe are particularly concerned since many of their long-distance routes rely heavily on a stable fuel price.
The situation is also causing uncertainty for the demand for travel around the world. Higher ticket prices can sometimes lower passenger bookings, especially on leisure travel.
