Recommendations of the Editorial team
The Strait of Hormuz has been closed for weeks and the ongoing US-Israeli war against Iran continues. As global economies prepare for the massive oil shock that is expected to rock markets as the last pre-war shipments arrive at ports, major airlines are already feeling the pinch of fuel shortages – and pass it on to consumers.
On Thursday, American Airlines became the latest international airline to raise fees for checked baggage and other ancillary services to offset increased fuel costs. Delta, United, JetBlue and Southwest Airlines previously announced changes to their baggage fares earlier this month.
The price of kerosene has almost doubled since the start of the war. This week it hit a high of $4.88 a gallon, compared with around $2.50 at the end of February.
Increase in air transport prices
Overall, domestic airfares in the U.S. are up 10 to 20 percent, depending on route and date—and international travel is seeing even more dramatic increases as travelers around the world make their summer plans.
In response to increased operating costs, airlines have also begun cutting route frequencies and flight volumes. Skyrocketing jet fuel prices will also impact trade, freight and mail. Amazon has announced that it will introduce a temporary 3.5 percent surcharge on retailers to cushion the price increase. The United States Postal Service has also introduced a temporary 8 percent surcharge on packages, and FedEx is adding a surcharge of more than 20 percent for certain services – and has also announced a tiered fee system that triggers higher surcharges in proportion to rising jet fuel and diesel prices.
On Wednesday, Transportation Secretary Sean Duffy – one of the many former Fox News hosts in Trump’s cabinet – claimed in an interview with CNBC that airline CEOs “feel really good about the [Treibstoff-]Supply”.
Duffy defends Trump’s course
“The president is thinking short-term,” Duffy said. “Thanks to President Trump and American energy dominance, we have a lot of energy in the United States. So we are less reliant on the Strait of Hormuz than we would have been, say, 25, 30 years ago – because of fracking.”
The closure of the strait, rising fuel costs and reduced supplies of other essential goods moving through the war-torn region are expected to hit nearly every sector of the global economy.
As Americans, still reeling from the post-Covid inflation shock, brace for even higher prices, the president is making clear that they should not expect help from the federal government to meet their growing everyday costs.
Trump: No money for social welfare
“We can’t take care of child care. We’re a big country. And we fight wars,” Trump said last week. “It’s not possible for us to take care of child care, Medicaid, Medicare, all of those things.”
When it comes to wars, however, the wallet seems to have no end.
