European flight prices are falling in the short term as airlines try to overcome customer "hesitancy" over the economic impact of the US-Israel conflict with Iran, according to Wizz Air's chief executive József Váradi.
Váradi said European carriers can afford to cut prices temporarily because they purchased fuel at pre-conflict prices through hedging strategies. This contrasts with many airlines that have been raising fares or reducing flights due to surging jet fuel costs caused by the war.
Meanwhile, Spain's industry and tourism minister has advised travelers to book flights sooner rather than later to avoid potentially higher fares driven by the conflict.
Jet fuel prices in Europe have skyrocketed since late February, when the US and Israel launched attacks on Iran. The price per metric tonne has more than doubled from $831 to around $1,500, though it has dipped from a peak of $1,800. Europe relies heavily on jet fuel imports, with over half normally coming from the Gulf region, but supplies have been blocked for eight weeks by the effective closure of the Strait of Hormuz.
Despite fuel price hikes, Váradi downplayed fears of summer disruption, saying, "I don't think we'll be running out of fuel." He noted that tankers are already heading to the US to bring fuel to Europe. However, he warned that if shortages did occur, it would create a "complete mess," potentially leading to cancellations at airports without fuel.
To combat consumer hesitation, Váradi explained that airlines are using price stimulation. "Short term, you are actually seeing prices dropping," he said, attributing this to hedging policies that allow carriers to lock in lower fuel costs in advance. In contrast, long-haul carriers—particularly US airlines—do not hedge, leading to rising fares on those routes.
Spain's Minister for Industry and Tourism Jordi Hereu echoed concerns about potential price hikes, recommending that customers buy tickets now while airlines are still using cheaper fuel purchased earlier. "It's already clear that prices have risen and this could affect demand," he said.
Even if the conflict ends soon, Váradi predicted jet fuel prices will remain elevated for "a considerable period," estimating nine to 18 months. Mark Tanzer, chief executive of the association for British travel agents, reassured travelers that protections remain in place, noting that airline bodies are not currently seeing disruption to jet fuel supply.