British Airways Owner Warns of Higher Ticket Prices Amid Iran War Fuel Crisis

The owner of British Airways (BA) has warned of higher ticket prices as the closure of the Strait of Hormuz due to the Iran war has led to a sharp rise in oil prices.

International Airlines Group (IAG) said on Friday that the situation in the Middle East will increase the cost of flights to reflect higher jet fuel costs.

Airlines often buy a proportion of their fuel in advance at fixed prices to protect themselves against price volatility, a practice known as "hedging".

However, IAG said that, despite its fuel hedges, it was "not ​immune" to the broader fallout from the conflict in the Middle East.

IAG insisted that it was not yet seeing any disruption to its jet supply amid warnings of future shortages due to the conflict.

The government is "closely monitoring" fuel stocks as airlines prepare for potential shortages, with oil tankers still unable to pass through the Strait of Hormuz.

It was also revealed that airports will make it easier for airlines to cancel flights without risking losing their allocated take-off and landing slots if fuel shortages stop them from flying.

The Department for Transport (DfT) said airlines will no longer be required to follow the "use it or lose it" rule at UK airports, whereby carriers must use at least 80% of their allocated slots during a season to keep them for the following year.

"Airport Coordination Limited, the independent body that manages slot allocation at UK airports, has updated its guidance so that airlines will not lose their slots if fuel shortages prevent them from flying," the DfT update said. "Airlines can now apply for an exemption from the 'use it or lose it' rule in these circumstances."

Meanwhile, Jet2 has moved to reassure holidaymakers that its flights and holidays will operate "as normal".

A spokesperson for the airline said its flight schedule remains unaffected for the foreseeable future.

"We remain in continual dialogue with our fuel suppliers, as is standard practice," the spokesperson said. "Based on the conversations we have been having, we see no reason not to look forward to operating our scheduled programme of flights and holidays as normal."

It is understood that Virgin Atlantic and easyJet are also expecting to operate as normal.