By Alexandra Skores, Chris Isidore, CNN
Washington, DC (CNN) — As the war with Iran continues, oil prices are soaring and airlines will see higher fuel costs – which could hit travelers around the world in their wallets.
It will “probably start quick,” United Airlines CEO Scott Kirby told CNBC last week.
Crude oil prices surged after the US and Israel’s strikes on Iran and hovered around $100 a barrel on Thursday, closing above $100 for the first time in nearly four years, before closing the week slightly lower at $99 a barrel.
The war has also had massive operational impacts on airlines in the region, with nearly 50,000 flights canceled since February 28, according to aviation analytics firm Cirium.
Rob Britton is an adjunct professor of marketing at Georgetown’s McDonough School of Business and a retired American Airlines executive. He said for now, the availability of petroleum has only been slightly disrupted, but oil prices have soared.
“If fuel prices remain high, fares will rise,” Britton told CNN. “There’s no mystery there … So just doing some simple math, one might expect ticket prices to rise almost proportionately.”
Second to labor, an airline’s largest cost is jet fuel. Dependent upon crude oil prices, it could be 20-30% of an airline’s total expenses, Britton said.
“Historically, airlines have been prompt at raising fares when fuel prices spike,” he said.
Yet, airlines often have trouble freely passing on cost increases, such as higher fuel prices, to passengers, even if it’s costs being felt widely across the industry, said Zach Griff, author of an airline newsletter, From the Tray Table.
“There’s so much more to flight prices than just the cost of fuel or even just the cost of operating a given flight,” he said.
The demand for travel will have the greatest impact on fares that airlines can charge, Griff noted. If inflation or rising unemployment makes business and leisure travelers cut back on their plans this summer, the airlines won’t have a lot of ability to raise fares, no matter their costs.
Fuel and oil “can be extremely volatile and unpredictable, and even a small change in market fuel prices can significantly affect profitability,” Southwest Airlines’ 2025 annual report noted. “Passengers often purchase tickets well in advance of their travel, and the Company may not be able to increase fares, impose fuel surcharges, increase revenues, or decrease other operating costs sufficiently to offset rapid or prolonged fuel price increases.”
Kirby told CNBC that fuel prices could have a “meaningful” impact on United’s next quarter financial results.
“If it continues, we’ll feel it in Q2 also,” Kirby said after an event last week at Harvard’s John A. Paulson School of Engineering and Applied Sciences.
At a Punchbowl news conference this week, Secretary of Transportation Sean Duffy expressed optimism, predicting a “recovery in energy markets” and praising President Donald Trump’s engagement in the conflict.
Airline cuts that could hurt passengers
Higher fuel costs have the potential to hurt passengers in another way – airlines may re-examine whether to keep some flights that were profitable with lower fuel prices but are now unprofitable.
With fewer choices for passengers, a reduced supply of tickets could itself be a factor that could raise fares.
“Airlines are going to have to keep very close tabs on costs i