Virgin Atlantic adds fuel surcharges as Middle East conflict pushes up jet fuel costs

Virgin Group founder Sir Richard Branson has linked rising flight prices to the conflict involving Iran, the United States and Israel, saying the war has driven up oil and jet fuel costs. He said there was no need for the war and described it as the result of foolish leaders starting conflicts. Virgin Atlantic has already responded by adding a fuel surcharge to ticket prices in May.

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The airline said the surcharge was necessary because of the level of fuel prices. Its chief executive, Corneel Koster, said it was absolutely required at current fuel costs and added that it was hard to be optimistic about the situation in the Middle East. The surcharge added £50 to an economy fare, £180 to premium and £360 to business class, according to the company.

The price pressure has been visible in the wider fuel market. The European benchmark jet fuel price had been around $800 a tonne before the outbreak of the conflict, then spiked to more than $1,800 in April before easing to about $1,450. The article says Middle East tensions have choked the production and transportation of millions of barrels of oil, affecting both car fuel and aviation fuel.

That has fed through into airline pricing and, in some cases, route and schedule changes. The issue matters because jet fuel is one of the biggest operating costs for airlines, and sharp moves in oil-linked prices can quickly affect fares and capacity. The article says several of Virgin's rivals cut flights and raised fares after the conflict began.

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It also notes that analysis by consultancy Teneo found the Iran war had led to a 25% increase in air fares in April, underlining the scale of the market shock. Branson also argued that the conflict was unnecessary, pointing to a nuclear agreement between Iran and other countries that he said had been negotiated under former US President Barack Obama and European leaders. He said the agreement had been working before it was torn up, and that the war had contributed to higher oil prices and inflation around the world.

US President Donald Trump has defended the conflict as necessary for long-term peace and security, according to the article. Virgin Atlantic said it did not plan major changes to its winter schedule, although capacity had already been slightly reduced earlier in the year. Koster said the airline could still trim flights on routes with weak demand in the depths of winter, but no broader shift was announced.

What remains unclear is how long fuel prices will stay elevated and whether further fare rises or schedule cuts will follow if the conflict continues.

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