BA chief warns fares will keep rising amid fuel crisis

British Airways CEO Warns Fares Will Rise if Fuel Costs Stay High

British Airways chief executive Sean Doyle warned that airfares will continue to climb if elevated jet fuel prices persist, delivering the message on the sidelines of the International Air Transport Association’s annual general meeting in Rio de Janeiro this weekend.

“There’s no getting away from if fuel goes up, fares have to go up,” Doyle said in an interview at the IATA summit, according to a report by the Financial Times.ft

Fuel Crisis Deepens

The warning comes as global airline executives gather at the 82nd IATA AGM, running June 6-8, to confront what has become the sharpest test of the industry’s post-pandemic recovery. The conflict in Iran, which began in February, has choked off roughly 20 percent of global oil supply through disruptions to the Strait of Hormuz, sending jet fuel prices sharply higher.youtube

IAG, the parent company of British Airways, told investors during its first-quarter earnings call in May that it now expects a total fuel bill of €9 billion for 2026 — €2 billion more than the scenario it outlined at its full year results in February. The group said it expects to recover around 60 percent of that additional cost through fare increases and cost management.travellingforbusiness

Premium Passengers Bear the Brunt

Doyle indicated that fare increases are more likely to come after the main summer travel season, with the airline’s long-haul and premium customer base providing greater flexibility to pass through costs than leisure-focused carriers face. On IAG’s Q1 earnings call, executives confirmed that pass-through rates are strongest in long-haul premium markets, while short-haul European routes — where competition remains fierce — see lower recovery rates.iairgroup

British Airways delivered strong profits in the first quarter, with passenger unit revenues up 8.5 percent, driven by robust demand across its long-haul network and particularly on North Atlantic routes.iairgroup

Industry Under Strain

The fuel shock has already claimed casualties. Spirit Airlines ceased operations in May, and Reuters reported that airline chiefs at the Rio summit are raising fares and tightening capacity to cushion the blow. IAG CEO Luis Gallego said during the May earnings call that weaker competitors may struggle, potentially creating opportunities for stronger carriers. “Usually, after these crises, we are even stronger than we were before,” he said.npr

IATA has called for governments, particularly in Europe, to reduce taxes and charges to help airlines navigate the higher cost environment.flightglobal