Holidaymakers could face higher air fares following the surge in oil prices sparked by the war in the Middle East, airline chiefs predicted on Wednesday.
Jet fuel prices have soared 50 per cent since the US and Israel struck Iran four weeks ago, according to Irishman Willie Walsh, chief executive of the International Air Transport Association.
Carriers in some regions are already passing on the extra cost to passengers, added Walsh, whose organisation represents 85 per cent of the world’s airlines.
However, Irish and European travellers have a “little bit more time”, he said, as airlines here buy fuel in advance at set prices to avoid volatility, a practice known as hedging.
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Walsh pointed out that fuel accounts for 26 to 27 per cent of airlines’ costs. As their margins are already tight, they would have no choice but to increase fares. “It’s happening now,” he added.
Eddie Wilson, chief executive of Ryanair DAC, the Irish group’s biggest company, noted that it was 80 per cent hedged for this year, while it had sold much of its flights for Easter, the year’s first big holiday period.
[ Dublin Airport passenger cap sent air fares soaring, DAA to tell TDsOpens in new window ]
He acknowledged that higher fuel prices could hit fares later in the year, pointing out that Ryanair had to buy 20 per cent of its fuel on the spot market, where increases are felt most.
Wilson noted that some European airlines had already responded to the problem by cancelling flights.
Meanwhile, North American airlines warned the Oireachtas Joint Committee on Transport that the Republic would lose flights to the US if politicians fail to lift the 32 million a year passenger limit on Dublin Airport.
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Chris Sununu, chief executive of industry body Airlines for America (A4A), told TDs and senators on Wednesday that US carriers had discussed the issue in the White House.
The group has formally complained to the US department of transportation that the cap breaches the US-EU open skies air travel treaty.
“There’s a very strong possibility that you will lose flights to New York, that you will lose flights to the US, absolutely,” he warned.
Sununu was answering questions on likely retaliation if US airlines lose flight slots to Dublin as a result of the cap.
[ Airport cap not meant to halt growth, Oireachtas committee toldOpens in new window ]
He stressed that the Trump administration was aware of the issue, was watching it carefully and would act quickly once it had decided how to respond.
Cathal Crowe TD challenged A4A’s argument that the cap violated the US-European Union (EU) open skies agreement and called on the organisation to withdraw it.
Green Party leader, Roderic O’Gorman TD, argued that A4A was presenting its opinion as legal fact. He accused the organisation of using the “implied threat” of the Trump regime to pressurise the Oireachtas into axing the cap as quickly as possible.
However, Sununu countered that the treaty allowed each jurisdiction’s airlines unfettered access to the other up to the capacity of their airports.
“This is a clear violation, you cannot artificially limit access,” he argued.
Airlines urged the Oireachtas to quickly pass the Dublin Airport (Passenger Capacity) Bill 2026, which will enable Minister for Transport Darragh O’Brien to scrap or amend the limit.
Walsh argued that the Oireachtas must pass the law long before October, when the Irish Aviation Authority will set conditions for take-off and landing slot allocations at Dublin for summer 2027.
If it is not resolved by then, airlines will assume that the cap remains and move aircraft to Britain and Europe, costing the Republic jobs and investment, he predicted.
Ryanair urged the Oireachtas to abolish the cap, saying the Government pledged to do so when it took office 16 months ago. “We need to just get on and do it,” Wilson stressed.
Enforcing the cap will cut passenger numbers at Dublin to 32 million, from 36.4 million last year, which Aer Lingus chief executive, Lynne Embleton warned would be economically catastrophic.
She stressed that the legislation was the last opportunity to resolve the controversy over the cap before the State began to suffer consequences.
