Virgin Atlantic CEO Corneel Koster declared higher jet fuel prices are “here to stay,” citing ongoing Middle East instability as a key driver. The airline added fuel surcharges—£50 for economy, £180 for premium, and £360 for upper class—yet still faces an expected loss this year despite strong bookings. Koster emphasized that prolonged geopolitical tensions, including the U.S.-Iran ceasefire’s limited impact, have pushed “all-in jet fuel prices” to over double pre-war levels, straining global aviation margins.**

Brent crude prices surged above $100 a barrel following Trump’s proposed Strait of Hormuz blockade, exacerbating supply fears. Airlines like Air India and Air New Zealand have also imposed fuel surcharges, while Air France-KLM faces potential route cuts due to fuel scarcity risks. Virgin Atlantic, 60% hedged against fuel costs, remains exposed to price volatility, though no flight adjustments have been made yet.**

ACI Europe warned European hubs could face “systemic” jet fuel shortages within three weeks if the Hormuz Strait remains closed. Koster noted Virgin’s current resilience but acknowledged broader industry challenges: “No matter what happens in the Gulf… disruption to global energy prices will persist.” The airline’s 2024 pre-tax profit contrasts with last year’s loss, highlighting fragile recovery amid cost pressures.**

With airlines reporting robust demand despite rising expenses, Virgin Atlantic’s focus on UK-U.S. routes and new destinations like South Korea underscores adaptive strategies. However, sustained fuel price hikes threaten profitability, forcing carriers to balance surcharges, hedging, and operational adjustments to navigate uncertain markets.