The Department of Transportation revealed that aviation fuel prices increased by 56% over the war in Iran.
The DOT posted the update as required periodically by the Office of Management and Budget. In February, it reported that airlines collectively paid $3.23 billion, while in March it paid $5.06 billion, a 56% increase. The price per gallon for aviation fuel rose from $2.39 per gallon in February to $3.13 per gallon in March.
“Airline fuel costs may be affected by hedging, contracts that allow airlines to limit exposure to future price changes,” the DOT said.
The prices only seem set to rise, as vessels continue to be stranded in the Persian Gulf due to Iran’s closure of the Strait of Hormuz. The impact is likely to be felt soon by passengers, who could see higher plane ticket prices.
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The sharp rise in aviation fuel costs dealt the final death blow to Spirit Airlines, which cited the increase as the main cause for its closure.
Other budget airlines could be put in jeopardy by the rise, with their smaller profit margins giving them less flexibility for dealing with a crisis.