U.S. crude oil prices have surged nearly 70% since January and jumped more than 35% in just the past five days, driven by the ongoing conflict in Iran, NBC News reports.
The spike is already hitting consumers at the gas pump — and aviation experts warn that jet fuel costs are expected to rise as well, signaling higher airfares ahead for travelers.
Last week, United Airlines CEO Scott Kirby noted the spike in fuel prices, saying they will have a “meaningful” impact on the airline’s financial results this quarter, according to CNBC.
Kirby noted that airlines have largely moved away from hedging strategies — and even when they do hedge, managing the crack spread, which refers to the gap between crude oil prices and refined products like gasoline, is extremely difficult.
He warned that the impact on airfares would likely come "probably start quick." Despite the cost pressures, Kirby said travel demand has remained strong, with booked revenue up 20% compared to a year ago — showing no signs of slowing down.
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