European jet fuel near $1,450 a tonne after April spike above $1,800
Virgin Atlantic announced two developments on the same day: the airline expects to operate 95% of its regular winter schedule, and it has secured the contract to fly Team GB and ParalympicsGB to the 2028 Los Angeles Summer Olympics. Both announcements were made as jet fuel costs continued to shape air travel and as the carrier’s founder publicly blamed the Iran conflict for higher ticket prices.
Corneel Koster, Virgin Atlantic’s chief executive, told the BBC that despite higher fuel costs the carrier did not plan “big changes” to its winter schedule. Winter capacity had already been slightly reduced a few months earlier, Koster said, and if demand dropped on certain routes “in the depths of winter,” the airline would trim selectively — what Koster called “capacity discipline” — but not “big percentages.” The 95% figure reflects that posture.
The Olympics deal marks a shift in the British corporate sponsorship of Team GB’s travel. British Airways had flown the British Olympic teams since 2008. Virgin Atlantic said it had secured the contract to fly both Team GB and ParalympicsGB to the 2028 Games in Los Angeles.
The capacity and contract decisions sit against a backdrop of elevated fuel costs. The European benchmark jet fuel price had been hovering around $800 (£590) a tonne, spiked following the outbreak of the Iran war to a peak of over $1,800 in April, and has since dropped to around $1,450. The BBC reported that Middle East tensions disrupted the production and transportation of millions of barrels of oil, causing a surge in the price of car and jet fuels, which are made from oil.
Virgin Atlantic responded to the higher costs with a fuel surcharge introduced in May, adding £50 to an economy class fare, £180 to premium, and £360 to business class. Koster said that for “this level of fuel price” fuel surcharges were “absolutely required,” and that it is “hard to be optimistic at this moment about the situation in the Middle East.”
Virgin Group founder Sir Richard Branson, speaking to the BBC alongside the contract announcement, was more pointed about the cause of higher flight prices. Branson called the Iran conflict “completely unnecessary” and said there was “no need” for the war, in what the BBC described as a thinly veiled reference to the US-Israel conflict with Iran. “There was a nuclear agreement between Iran and the rest of the world that had been negotiated by President Obama and a lot of European people,” Branson said. “It was working, so there was no need to rip it up… And this war has just resulted in much higher oil prices all over the world. And inflation has been one of the consequences.”
Several of Virgin’s rivals have also raised fares and trimmed schedules. In April, analysis from consultancy firm Teneo found the Iran war had led to a 25% increase in air fares. This week Ryanair said it would reduce its winter schedule because of higher fuel prices, and warned European short-haul fares would “increase materially” if jet fuel prices continue to rise until next summer. US President Donald Trump has repeatedly defended the conflict as necessary for peace and security long-term; the BBC has contacted the White House for comment.