Airlines are cutting flight prices to lure tourists into booking summer holidays, after concerns about jet fuel shortages have seen holidaymakers holding off.
Industry figures have identified that consumers have been delaying buying flights after repeated warnings about uncertainty caused by the war in the Middle East.
Iran closed the Strait of Hormuz after being attacked by Israel and the United States, limiting the flow of vital goods from the region, and sending prices up.
Jet fuel is one of the affected commodities, with prices having doubled since before the war and widespread warnings about shortages first issued at the start of April.
Since then, prices for flights to some of the most popular destinations in southern Europe have counterintuitively decreased, according to analysis by the Financial Times.
Between April 9, when European airports first warned jet fuel was in danger of running out, and May 6, fares for a week-long trip in July dropped for 27 of the top 50 European flight routes.
They declined by 10 per cent or more for 15 of the routes, including from Heathrow to Nice, and as much as 44 per cent in the case of Milan to Madrid.
While prices on some of the other routes increased, the change was smaller.
The boss of Wizz Air advised passengers to buy tickets now to avoid prices increasing
Airlines and holiday companies are now locked in a ‘confidence game’ with consumers, according to Barclays analyst Andrew Lobbenberg.
He said: ‘People are reluctant to book, they are booking late and the airline and holiday companies are having to incentivise them with lower prices.’
Notably, this is being borne out primarily in the European market, while travellers in the US are apparently unperturbed.
Trivago managing director Johannes Thomas told the FT that ‘in times of crisis… people stay domestic’.
This was reflected by an Ipsos survey, which found that a fifth of people had switched an international holiday for a domestic one this year, while another fifth is considering the move.
Wizz Air chief executive József Varadi explained: ‘There is an element of uncertainty in the short term, people don’t know what is going to happen, am I going to lose my job? Am I not able to fuel my car? There is a level of hesitancy.’
He advised consumers to buy now, because waiting may lead to higher prices.
While prices are moving in the right direction for customers within Europe, carriers that operate more long-haul routes have warned their flights may get more expensive.
However, package holiday providers are following suit by slashing prices, with holidays £110 cheaper on average than a year ago.
Caspar Nelson, holiday expert at On The Beach, said last month: ‘Every day prices seem to be going up, petrol, energy and mortgages to name a few, but in April, deals for holidays departing in the next three months are cheaper than last year.
‘This is a rare, sunny spot for consumers right now and our advice is quite simple, now is the right time to book and lock in your price, take advantage of these deals while they are still working in your favour.’
