Carriers, travel agencies and analysts say consumers are holding off on bookings after a series of warnings about the possible need for fuel rationing following the conflict with Iran that led to the closure of the Strait of Hormuz three months ago.
– We are living in times similar to those during the pandemic, Turkish Airlines CEO Murat Şeker told investors. “There is still a lack of long-term predictability,” he added.
Read also: Fuel crisis in Europe? Swiss International Air Lines with contingency plan
Where is it cheaper?
Since the first widespread warnings of jet fuel shortages in early April, flight prices to some of southern Europe's most popular destinations have been falling – according to an FT analysis of the cheapest fares on Google Flights.
Between April 9 – the day before European airports warned that the region could face jet fuel shortages – and May 6, prices for weekly travel in July fell on 27 of the 50 most popular European routes to the Mediterranean.
Prices decreased by 10 percent. or more on 15 routes, including Heathrow to Nice, Manchester to Palma and Gatwick to Barcelona. The largest decline – by as much as 44%. — recorded on the Milan-Madrid route.
On routes where prices increased, the changes were less significant. Price drops by 20%. or more were recorded on eight of the 50 most popular routes, while only two routes saw prices increase on a similar scale.
A game of trust
As the industry enters the peak summer season, airlines and vacation companies are playing a “confidence game” with consumers, trying to convince them to book, said Barclays analyst Andrew Lobbenberg.
— While U.S. travel is still booming, European tourists have languished in the spotlight. People are reluctant to book, they do it late, and airlines and travel companies must encourage them with lower prices, Lobbenberg added.
Fares have been cut on many major European routes, even as some long-haul carriers warn of increases due to higher fuel prices and tighter schedules. Airlines have already reduced the number of seats globally by 2 million in May schedules after jet fuel prices doubled; some of the cuts were intended to protect profits, and some were a response to falling demand.
