What the Iran war could mean for flights and travel

Despite so many countries working together to mediate between the US, Israel and Iran, the Middle East conflict continues to disrupt the Strait of Hormuz. 

The Strait is a narrow waterway between Iran and Oman that sees between 20%-30% of the world’s oil supply pass through. It’s essential to keep it clear for the global economy, but as tankers can’t move through freely and safely at the moment, a barrel of oil from the Middle East is priced like a much scarcer commodity than it would be normally.  

We’ve already looked at what this means for households, your personal finances, and food prices. 

Read here: What the Iran conflict could mean for your finances | Charles Stanley.

Read here: The link between oil and food prices | Charles Stanley

Now, we turn to airlines and flights.

Why airlines are exposed to conflict in Iran

Jet fuel is one of the airline industry’s biggest costs, often accounting for around a third of an airline’s costs of doing business.

Airlines are used to volatility in fuel markets, and many try to protect themselves by hedging oil prices. This means effectively paying a premium to lock in prices ahead of time. Southwest Airlines is well-known for it – buying fuel well in advance of its needs. Ryanair, IAG (British Airways’ parent company) and easyJet are also heavy hedgers. But even for these “protected” airlines, if prices are higher for longer, the impact will eventually show up somewhere – whether in fares, which routes are flown, or the number of flights that run. 

The most dramatic recent example comes from Spirit Airlines in the US. Spirit entered 2026 with already fragile finances and in February, based its planning on jet fuel costing around $2.24 a gallon. It didn’t hedge, and a month later, prices had surged above $4. The airline grounded its fleet and thousands of passengers found themselves stranded.

Nothing this bad is expected to befall a major British airline. Spirit was already in a dire state before the Iran war. But this example still goes to show how interconnected geopolitics, markets and business can be. The table below lays bare the disruption.

How badly are UK flyers affected?

For now, the official word from Westminster is meant to be reassuring: “UK airlines say that they are not currently seeing a shortage of jet fuel. The government is working with industry and international partners to keep passengers moving.”

But it really depends on what you count as a shortage.

If the conflict in the Middle East rumbles on, a shortage will be unavoidable without special measures. These measures will mostly affect those who travel often, who travel far, and who care about exact timings and place a premium on comfort when they fly.

Disruption can be experienced in four main ways:

1. Higher fares, which remain the clearest lever for airlines to pull.
2. Less profitable routes reduced or temporarily cancelled.
3. Flights merged to keep planes fuller and to save fuel.
4. Less availability, making it harder to find last-minute deals and premium class tickets.

Where are flyers most likely to notice problems?

The UK and the European Union are certainly exposed to higher oil prices, but regionally, the worst affected flyers are those relying on Asian airlines and Middle Eastern connection hubs. 

Asian refineries rely heavily on the Middle Eastern crude oil, accounting for almost two-thirds of their supply. The reliance is even more acute for highly industrialised economies such as Japan and South Korea. As a result, travellers planning to fly to or from Asia this summer need to check for price hikes and cancellations.

The Middle East itself is another obvious pinch point. Not only is it a region in conflict, but it’s a major connection hub. Dubai International is one of the world’s busiest airports owing to the huge volumes of passengers using it as a link between Europe, Asia, Australia and Africa. If full-scale war resumes, routes may have to avoid more regional airspace, adding to distance and cost. 

Thankfully, short-haul trips around Europe should be more dependable. Routes from London to Madrid, Rome or Malaga are some of the biggest earners for airlines, popular and not as complicated to run. Airlines will work hard to protect them.

How do airlines make decisions about flights?

Airlines are trying to get ahead of problems by cancelling unpopular long-haul flights in order to save jet fuel. Airlines will protect popular holiday routes and business corridors. Stanstead to Tenerife, Heathrow to New York and Luton to Nice should all be kept on the departures boards this summer. But routes with thinner demand may find themselves being sacrificed to make this possible.  

The government has also given UK airlines permission to consolidate flights on routes where they operate several services to the same destination in one day. In practice, that means two quieter flights can sometimes become one fuller one. This can be inconvenient for some flyers if they are moved onto a different flight, but again, it means less fuel burned.

And, of course, airlines have already started raising prices.

How much more expensive will flights be?

Because fuel is such a large cost, airlines have to decide how much of the extra expense they will pass on to passengers and how much they will absorb themselves.

Again, long-haul travel will be first impacted. A direct return ticket to Sydney or Los Angeles is exactly the sort of journey that already costs more to book now than before March. 

Crucially, only a few airlines are actually raising base fares, as you’d expect. There are many more introducing a temporary fuel surcharge, charging extra baggage fees or other extras. If you’re flying business class or first class, the increases may be more pronounced. So, be careful you don’t get caught out. Most airlines don’t draw attention to their price hikes.

Do I book now or wait?

The airlines will encourage you to book now. But in reality, the outlook for air fares depends heavily on a war that nobody can forecast with real confidence at the moment. If the Strait of Hormuz reopens and the oil price falls back to more “normal” levels, airlines may be able to lower fares and restore cancelled flights. But if the war drags on through the rest of the year, booking later could be even more expensive.

If you’re flexible about destinations and date, you might want to wait and see what happens. But if you have to travel, such as for a wedding or an important business trip, you might decide it’s better to get the certainty of what you’re paying now.

And it’s also worth keeping flight prices in perspective. On a large holiday budget, the airfare is still only one part of the overall cost once hotels, restaurants and experiences are factored in. A fare increase is frustrating, but it needs to be weighed up with everything else.

Insurance and compensation if you’re affected

If your flight is cancelled, airlines generally have to offer you a choice between a refund and an alternative route to your destination. That protection still exists after Brexit.

However, if you’re flying directly over a conflict zone or to the Middle East, airlines don’t necessarily have to compensate you if your flight is cancelled for certain reasons deemed outside of their control. In other words, a sudden escalation in the war and airspace closing.

That’s why we recommend taking your time over travel insurance. You’ll need to be sure you’re covered for the types of disruption explained in this article, as well as for the knock-on costs that often come from a cancelled or rescheduled flight. Don’t forget missed hotel nights, extra accommodation at airports, and food.

Periods of geopolitical tension can create uncertainty for travellers and investors. To keep tabs on the ongoing conflict along with other market insights and helpful guidance, visit the insights section of our website.