Middle East Turmoil: Rising Airfares and Fuel Supply Concerns

Airline executives warn of increased fares amid Middle East conflict, with canceled flights and rising fuel costs impacting the sector. The EU remains firm on climate goals despite calls for delays. Airlines urge postponement of sustainable fuel mandates, citing cost concerns and uneven competition.

European airline executives cautioned on Thursday about the financial fallout from the ongoing conflict in the Middle East, which threatens to elevate airfares due to a surge in cancellations and spiking fuel costs. Ryanair's CEO, Michael O'Leary, highlighted the bleak outlook if the conflict continues, pointing to concerns over jet fuel supplies.

The Middle Eastern crisis, now in its third week, is wreaking havoc on aviation by forcing flights to be canceled or rerouted across extensive distances, with a large portion of Gulf airspace still closed over fears of attacks. As a consequence, fuel prices have skyrocketed, with significant increases witnessed both in Europe and Asia.

Airline leaders have requested the European Union to delay certain climate policies, citing cost hikes caused by the conflict. Despite the lobbying efforts, EU officials maintain their commitment to green targets. Meanwhile, airlines are grappling with expiration of fuel hedges and the threat of uneven competition from carriers in other regions not affected by green fuel mandates.

(With inputs from agencies.)