War in Iran driving up the cost of flying due to volatile jet fuel prices

John Gradek said that the price of jet fuel is up about 30 per cent and the cost of fuel represents about 30 per cent of an airline's operating costs.

Experts say the war in Iran is driving up the cost of jet fuel, which will drive up the cost of flying.

“I think what you’re seeing happening now is a volatility in jet fuel that hasn’t been seen in years,” John Gradek, a former Air Canada executive and McGill University faculty lecturer in aviation management, told Global News.

Gradek said that the price of jet fuel is up about 30 per cent and the cost of fuel represents about 30 per cent of an airline’s operating costs.

“The airline’s margins that you typically have is about a three or four per cent margin on their sales,” he said. “So right now, with the cost of the fuel as we see it, they’re losing money on every flight. So what’s happening is that the airlines are trying, are scrambling to figure out how much of a fuel surcharge to put in.”

Gradek said Air Transat has already started adding a fuel surcharge to tickets and British Airways and Qantas are introducing some on Thursday.

“The world is starting to recognize that jet fuel is more expensive and fares are going up,” he said.

Gradek said that other airlines are trying to figure out what to do to keep costs manageable, but also profitable.

He said that WestJet made a statement on Wednesday that there is a significant cost increase in fuel, while Air Canada and Porter are contemplating what to do.