When should I buy plane tickets, as Iran war disrupts travel : NPR

The United States and other countries have agreed to tap their oil reserves, but the move may do little to bring down jet fuel prices quickly, an expert told NPR. This is one way violence in the Middle East can affect flights around the world. Here, an Emirates airliner prepares to land at Dubai’s main airport on Sunday.

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The war in Iran is shaking the aviation industry, from flight cancellations to rising jet fuel prices. So if you’re planning to travel this spring or summer, should you grab a ticket now or wait?

“You should go ahead and book,” says Sean Cudahy, an aviation reporter at the travel and personal finance website The Points Guy.

It is generally recommended to purchase international flights further in advance than domestic travel. But under the current circumstances, Cudahy says he would go ahead and even book domestic flights.

Its guidance shows how the conflict in the Middle East is impacting prices and routes around the world, beyond the thousands of travelers stranded after the war forced a barrage of flight cancellations.

Airlines warn ticket prices will rise with fuel costs

The war’s effect on travel was sudden and striking, leading to the cancellation of more than 46,000 flights to and from the Middle East between February 28 — when the United States and Israel began bombing Iran — and March 11, according to Cirium, the aviation analytics company.

This includes Dubai International Airport, the world’s busiest airport for international travel, according to the Airports Council International, as well as popular hubs Doha and Abu Dhabi.

But even airlines far from the Middle East are facing a sudden increase in a key expense: jet fuel. At the start of the year, a gallon of jet fuel cost $2.11; by March 10, the price had risen to $3.40, according to the Argus US Jet Fuel Index, a gain of more than 60%.

The spike came after tanker traffic through the Strait of Hormuz came to a virtual halt as Iran announced it would close the waterway that normally carries about 20% of the world’s oil and liquefied natural gas.

Middle East refineries were sending some 470,000 barrels of jet fuel across the strait each day to airports in Europe and elsewhere, says Rick Joswick, who leads the short-term oil analysis team at S&P Global.

The price of a gallon of jet fuel soared nearly $4 in the first week of the war, prompting United Airlines CEO Scott Kirby to say Friday that airline ticket price hikes linked to rising fuel costs would “likely start quickly.”

As they absorb higher fuel costs, airlines could adjust prices upward across the board, or they could raise premium fares, where they will be less visible, says Cudahy of The Points Guy.

Several airlines have publicly confirmed that they will raise prices to compensate, as reported by Reuters. Other carriers, such as Japan Airlines, publish a schedule of fuel surcharges triggered by cost increases.

“I think it will end up leading to higher rates for everyone,” Cudahy says. “The only question now is how big will it get and how long will it last?”

Air travelers stranded by the Iranian conflict are welcomed in Athens, Greece, after arriving Saturday on a charter flight from Dubai.

Giannis Antwnoglou/SOOC/AFP via Getty Images

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Giannis Antwnoglou/SOOC/AFP via Getty Images

The crisis parallels previous global disruptions

Higher fuel prices reflect a real struggle to ensure the aviation industry has sufficient supplies, Joswick says.

“It’s not irrational. It’s not the work of a trader who is driving up prices,” he says. Comparing the situation to the COVID-19 pandemic, he adds: “Toilet paper consumption hasn’t changed. But you notice that all the supermarkets are out of toilet paper, right? Everyone wants to be sure they have cover for a critical need.”

Cudahy and Joswick compare the ripple effects of the Iranian conflict to Russia’s launch of its full-scale invasion of Ukraine in 2022, which triggered flight disruptions and rising fuel prices. As long as the Strait of Hormuz is closed, Joswick says, prices will continue to rise.

“If this were to continue, it would be kind of like 1979. [oil] crisis,” he says. “Anything over a month, and you see a substantial increase in prices in the long term until flows are restored.”

The United States and other major economies can mitigate these effects by tapping their strategic oil reserves – which they chose to do on Wednesday. But Joswick predicts that while such a move may help ensure adequate oil supplies, it may not result in a big drop in jet fuel prices. For one thing, he says, U.S. reserves are focused on holding crude oil, not jet fuel. And he cites logistical challenges, such as California’s reliance on jet fuel that it produces or imports.

Tips for buying a plane ticket now

If you’re ready to take a chance and book a flight, Cudahy has some advice.

First, don’t buy a restricted basic economy ticket that you can’t change later, he says.

Instead, he recommends buying a regular economy class ticket at full price: “If the price ends up going down, then you can go back and change it and get the lower price.”

Another tactic, Cudahy says, is to use air miles.

“You can usually cancel it and get all your miles back later, if the price drops,” he explains.

Use services like Google Flights to compare prices and set up alerts for price changes. And if you book flights through a third-party site like Expedia, make sure you understand its cancellation and change policies, in case they differ from the airlines’.

Due to the risk of renewed hostilities in and around Iran, Cudahy said he would try to avoid nearby air hubs in the coming months.

But he wouldn’t wait to book a ticket.

“In the same way that we see relatively long lines at gas stations with people trying to fill up before the price rises even more than it already has, I would think the same thing when it comes to airline tickets right now,” he says.

Although you can drive an extra mile or two to find cheaper gasoline, airlines and airports don’t have that luxury when purchasing jet fuel.

“Prices are always set based on margin,” Joswick explains. “The last airport that needs to buy jet fuel will pay whatever it takes to get it. And then that price becomes the standard for the entire industry.”