Already elevated air fares could continue to rise if the conflict in the Middle East drags on and the Strait of Hormuz remains closed, Airlines for America CEO Chris Sununu said Wednesday.
In an interview with The Hill, Sununu said U.S. airlines are absorbing the majority of the increase in the price of jet fuel.
“They will eat most of that cost,” he told host Blake Burman. “The airlines themselves will lose $12 billion this year because they’re trying to avoid passing most of it on.”
But passengers have still felt the effects of unsettled energy markets, both through higher ticket prices and increased baggage fees. Sununu said fares have increased by about 20% over the last two months and may continue to rise.
“If there’s no resolution in Iran, will it continue to go up? It could go up a bit, yeah. Sure,” he said.
But Sununu also noted that demand remains strong, and customers around the world are still booking trips to cities hosting FIFA World Cup events. The tournament takes place this summer and will be jointly hosted by the U.S., Canada, and Mexico.
To help manage costs, many passengers are using airline points and rewards, Sununu said. Burman then asked if it was necessarily a good thing that travelers are being “forced” to use those points.
“I don’t know if they’re being forced, they’re just taking advantage,” Sununu replied. “They’re saying, OK, while things are expensive, I’ll take advantage and cash in my points.”
Asked when prices could return to normal, Sununu said the biggest contributing factor, jet fuel, will gradually decline in price once the Strait of Hormuz reopens. If the reopening comes soon, prices could moderate by the late summer or fall, he said.
Sununu also advised Americans looking to travel this summer to book as soon as possible, and said the ideal window for booking is 60 to 90 days out.
