How the war in Iran could end affordable air travel

सीखने का मोड चुनें:

Highlight:

3000 Oxford Words4000 IELTS Words5000 Oxford Words3000 Common Words1000 TOEIC Words5000 TOEFL Words

उपशीर्षक (70)

0:00This chart shows the percent change in the cost of jet fuel in the US in 2026, and it's not good.

0:07Same thing in Europe, where the price of jet fuel is at an almost four year high. Since the conflict

0:13in the Middle East led to the Strait of Hormuz closing, about 20% of global oil supply has been

0:20choked off, sending the price sky-high and leaving airlines stuck with enormous bills for fuel.

0:26Costs are way up for airlines and ultimately air travel becomes more expensive for passengers.

0:30Airlines who struggle to make money in the best of times potentially see this as an opportunity to

0:35raise prices, obviously in the name of higher fuel costs, but to keep those prices higher for longer,

0:40maybe even never bringing them back down. So far, the war may be costing the airline

0:46industry an additional $15 billion. And it's hitting low-cost airlines especially hard,

0:53even contributing to the May 2026 closure of Spirit Airlines. But that could only be the

0:58beginning for the industry and consumers as airlines face down a crisis. Fuel generally

1:05accounts for about 25 to 30% of operating costs for an airline. If the price of fuel is impacted,

1:12so is the airline's bottom line. So, we're talking literally hundreds of millions into

1:17the billions of dollars collectively as a US industry in extra fuel. And you've probably

1:21noticed how airlines have passed many of those costs on to consumers. They upped bag fees,

1:27which will not come back down, by the way. They are immediately upping fares. They are cutting

1:31routes that are now unprofitable because it's too expensive to run them with the higher fuel costs.

1:35CEO Scott Kirby says consumers should be aware that ticket prices are rising and he warns the

1:41increase needs to be at least 20% to offset rising fuel costs amid the war with Iran.

1:47We are absorbing probably 50% of the cost on our own and probably about 50% will go into pricing.

1:54For the big companies like Delta, United and American, despite revised profit outlooks,

2:00business is still booming. That's because they're much more dependent on their premium offerings and

2:05customers who are still reliably buying expensive flights. If you look at the profit per seat,

2:10many airlines make much more money off business class and particularly premium economy passengers.

2:16Before the 1978 Airline Deregulation Act, flying was firmly for the wealthy. Since then,

2:23the introduction of low-cost airlines has made travel cheaper and more accessible for many.

2:29But these smaller, more affordable carriers don't have the same resources as big companies for

2:35offsetting fuel costs. They don't have long haul business class to lean back on. They don't have

2:40billion dollar a year loyalty programs to lean on. They don't have millions of people signing up for

2:44their credit cards every month. Many low-fare airlines only have enough money in the bank to

2:50keep operating for, you know, weeks. Just look at Spirit Airlines, which recently collapsed,

2:56publicly stating it couldn't keep up with the cost of fuel. And when a low-cost carrier like Spirit

3:01goes under, it has a ripple effect through the entire industry. When a low-cost carrier comes

3:07into a specific market, those fares almost always start coming down. When they go away, the opposite

3:13happens. The moment Spirit goes out of business, you're going to be paying more. We've already seen

3:18in the weeks since Spirit has shut down that fares have gone up on those routes. There are folks that

3:22are not going to be able to fly at all with the death of Spirit. There are airlines already who

3:28are struggling to remain solvent and these extra costs will push them over the edge. People expect

3:32whether in Europe or America or across the world, there are going to be many others to

3:36follow. European airlines also face another issue: a looming fuel shortage. In April, the head of the

3:44International Energy Agency claimed that Europe was running out of fuel. In Europe, we have maybe

3:49six weeks or so of jet fuel left if we are not able to open the Strait of Hormuz. Since then, the

3:58shortage in Europe has been temporarily resolved by tapping into emergency reserves, importing from

4:04other countries, and redirecting fuel cargos. But these fixes are only set to last through

4:09the end of the summer. They're saying we're good till August. We want to prepare for the worst,

4:12but we also don't want to panic the public, or our shareholders, or the stock market. All of these

4:17factors, fuel costs, shortages, and financial struggles for low-cost carriers, could kickstart

4:23long-term changes in how airlines operate and who can afford to fly. If the conflict carries on for

4:30the rest of this year and jet fuel prices stay as high as they are, or maybe even keep going up,

4:35this could tip into being a full-blown crisis for the global aviation industry. We would see a much

4:41larger wave of bankruptcies and consolidation. People could be priced out of flying for years

4:47to come. Less competition, higher fares, loss of jobs, loss of service, loss of non-stop flights,

4:53nothing but bad stuff for both labor and consumers. Even if the war were to end tomorrow,

4:59the cost of jet fuel and the airline industry at large could take a while to stabilize.

5:04If the war is settled and and oil is flowing again out of Iran, even if that happens, we're

5:11still looking at problems for months to come. And if people flying on the major airlines are willing

5:16to pay more for tickets now, it begs the question whether fare prices will come down even when the

5:22war ends. I don't think that they're going to bring down fares. I think they're 100% going

5:26to ride the wave, bank on the fact that people are going to accept that this is the new norm,

5:31as we constantly keep doing, and ride the high. What's more, airlines were already raising prices

5:37before the war with Iran, after over 40 years of consistently dropping. The cost of jet fuel could

5:44keep ticket prices climbing to the point where travelers with lower incomes could just be priced

5:49out of flying altogether. There's been a feature of the last few decades where flying has become

5:54incredibly affordable. Some people worry if prices rise too much, particularly with the inflation in

5:59the economy and the cost of living squeeze going on everywhere else, that this might be an era that

6:04might potentially be coming towards an end. At the center of this issue is an existential question:

6:09Is air travel a transportation necessity or a luxury privilege? It makes sense for them and

6:15for their shareholders, but it doesn't make sense as a national transportation system

6:19that's so vital to all of us. Only time will tell whether this is a moment of short-term

6:24economic pain brought on by the war or the beginning of a systemic shift in how we fly.

श्रवण अभ्यास

How the war in Iran could end affordable air travel

Highlight: