Major U.S. and European airlines are treating Middle East tensions as a minor detour, raising ticket prices while making only modest capacity cuts following the Strait of Hormuz closure. United Airlines plans a 5 percentage point reduction spread through year-end, while American Airlines trimmed just 1 percentage point from its capacity outlook through June.

European carriers show even less urgency. Lufthansa's reduction of 20,000 short-haul flights represents just 1 per cent of annual operations, and Air France-KLM slashed its full-year capacity growth target to 2-4 per cent from 3-5 per cent. The moves suggest executives view jet fuel supply concerns as temporary rather than structural.

Yet demand signals are weakening. U.S. passenger numbers have fallen below year-ago levels, and government data confirms a drop-off beginning this month. In Europe, EasyJet and tour operator Tui have already warned of softer booking demand for the summer season.

The industry appears to be betting that fuel fears won't materialize while ignoring a more fundamental risk: travelers may simply stop flying if costs rise too high. With inflation already squeezing household budgets, airlines face a potential squeeze from both supply costs and falling demand — a scenario their current capacity plans don't seem to account for.