The Current - Skyrocketing airfares may be here to stay

Episode Date: April 16, 2026

Air travel is getting more expensive.. A global jet fuel crunch, driven by conflict in the Middle East, is pushing up costs and starting to disrupt supply in parts of the world. Airlines are already adjusting — raising fares, adding fees, and in some cases, cutting routes. John Gradek, an aviation lecturer at McGill University, explains what’s driving the spike, what it means for your summer travel plans, and why higher prices could stick around even if the crisis eases.

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Just search for Q with Tom Power wherever you get your podcasts. This is a CBC podcast. Hello, I'm Matt Galloway, and this is the current podcast. I can't book a flight. Everything is expensive. Usually when I travel to Italy, it would only cost me about 80 euro. And if I'm lucky on a Tuesday, I can get it for 60, budget airline. But now, the prices are starting from 200 to 250.

That is a massive stretch. That's a travel influencer who goes by the name Ram, reacting to the spike in airfares. The war between the United States, Israel and Iran, and the closure of the Strait of Hormuz, have been pushing fuel prices way up, and that is having a direct effect on the aviation industry and the cost of flying around the world. John Graddock is a lecturer at McGill University in Aviation and Supply Chain Management. Previously, he held senior positions at Air Canada. John, good morning.

Good morning, Matt. Just heard that influencer talking about ticket prices in Europe. How much more expensive are tickets getting here in Canada? They're getting there. Over since February, since the end of February when the war started, we've had some carriers decide to put some things called surcharges in place on some other products, but most of the activity is really on increasing the actual airfare. So you don't really see it on your ticket as a surcharge.

You see it as part of your regular airfare charges. Tell me more about that, because WestJet and Air Canada have both added those fuel surcharges and they're being passed along to customers. What specifically, do we know how much they're charging for the fuel surcharge? Yeah, they are. They've made that public. I think our friends over at WestJet have decided that they would put a surcharge in for people that are using companion tickets on their frequent flyer programs.

So if you get a companion ticket and you trade in your miles, you'll get an additional charge of $40 associated with fuel. So that's how they're doing it. Air Canada is doing it on their vacation packages, on the air canadification package, they throw on a surcharge of $50 into those charges as well. But you're suggesting that that's not it, that those airlines are also just increasing prices across the board.

Yes, that's exactly what they're doing. How much do you think the average customer will tolerate in terms of an increase in price? Depends on the total airfare. If you're adding $50 on a $1,200 ticket to Frankfurt or to Zurich, not a big deal. But if you're doing it on a flight from Montreal to Sets Hill, it becomes a big deal.

So I think that, you know, depending on the length of haul, the charges they've put in place, you know, are, I would say, you know, oriented towards, you know, recovering something but not turning away traffic by increasing the charges too much. And I think that's that, you know, they're being very sensitive in terms of how much the passengers will, in fact, tolerate as an increase

before they say, well, we're not going to fly. This week, as we know, the federal government suspended the four cent per liter excise tax. on aviation fuel, if this surcharge and the increase in prices is meant to compensate for an increase in the cost of jet fuel, will holding that tax back make a difference? Not really. It's minuscule compared to what's going on in terms of the price of aviation fuel. Aviation fuel, you know, at the end of February before the war, somewhere around $70 to $80 a barrel of aviation fuel, and that's different from the WTI price because it is a refined fuel.

it was around $70 to $80 a barrel. Now it's around $170 to $180 a barrel, depending on the city that you buy the fuel at. But in Canada, it's gone up at least, you know, at least double in Canada, the aviation fuel since the war started. Airlines have said that these fuel surcharges are temporary. You have said that the odds of these prices coming back down are slim to none. Yeah. What usually will happen is that that specific fuel surcharge that Westchets put on their companion tickets and Air Canada's vacations, has on their packages will probably come down. They'll probably be eliminated. The question is at what

level of fuel pricing are these charges going to be reduced or eliminated? And that's the big question. You know, the days of us going back to the old prices of aviation fuel, I think everybody's kind of got the conclusion that we're not going to see those days for a long, long time. So we're going to be somewhere between what we had in February and what we're seeing now. And we're going to have to decide, you know, the airlines are going to have to decide at what point did they think it's gone down enough to change those surchargers. But the actual fares that are in place in the marketplace as a result of, you know, they're trying to recover fuel cost. Those fares are there for a while yet. So we're talking about the cost of fuel. You have said the incoming tsunami is

going to be the availability of fuel. Earlier this morning, the head of the International Energy Agency said that Europe has six months of jet fuel. fuel left, maybe. That sounds bad. It wasn't six months, Matt, six weeks. Pardon me, six weeks of jet fuel left. That's even worse. Even worse. Yeah, we're going to be, you know, by the end of May, you know, we're going to, we're going to be out of fuel in Western Europe. I think what's happened. What does that mean? We're going to be out of fuel in Western Europe. Yeah, out of aviation fuel in Western Europe. Western Europe and, you know, and Southeast Asia, get their aviation fuel primarily from the Middle East.

So they supply 20 to 25% of the world's aviation fuel. There's a couple of large refineries in the Middle East that produce aviation fuel. And it takes about six to seven weeks for that fuel to, in fact, move from port loading until it gets to the airport in Western Europe and in Asia. So the last ship that carried aviation fuel left the Middle East on February 26th. It arrived in the Southeast Asia earlier or late last week, and that fuel is already being pumped into airplanes. There's nothing left in a pipeline in that C pipeline to basically replace fuel. So we're out of fuel in Southeast Asia as of next week, and we're out of fuel in Europe, probably sometime around the end of April, beginning of May.

What does that mean? A spokesperson for Ryanair told the Times of London that their fuel suppliers, to your point, only have been able to guarantee supply until mid-May. if by that point, six weeks or so out, there is not jet fuel in Western Europe. Practically, what does that mean? Cancel flights. We're going to have to look at flights that, you know, have been sold months ahead of time. And, you know, and they're looking at situations where Ryanair is saying at least 20% of their flights will be canceled as a result of, you know, the start of this lack of fuel in aviation, aviation fuel in Europe. So it is going to be traumatic.

You're starting to see in Italy last week in northern Italy, the BP who serves as a supplier for aviation fuel in Milan as an example, as told carriers that if you have a flight that's operating under three hours out of Milan, you're not going to get any fuel. We're only going to fuel those airplanes that have itineries of longer than three hours. So it means that Milan has already started to have flights canceled to, you know, locations like London or Parisians. Paris or Frankfurt, you know, or Barcelona, those flights are not operating anymore. So, you know, we're starting to see that crack in supply of fuel and then also in terms of cancellation. So it's dire straits. So for travelers who already have tickets purchased, summer, we're talking now on the 16th

of April, but summer vacations are already in the minds of people, let alone in their diaries and calendars. What does that mean for people who already have tickets purchased? Well, you know, the airlines have your money. So it is up to them to basically provide you with an alternative transportation if there is a cancellation that they're putting in place as a result of fuel shortages. The European rules are somewhat similar to Canada that if you have a flight canceled or delayed that you get some compensation, you're not going to get any compensation because of this because it is really outside of the control. of the airlines altogether.

So the only thing that you'll do is give you an alternative flight within 48 hours of your original flight, and they'll try to get you to your destination. And if they can't get you to your destination, they will give you a refund. What about here in Canada? We have a huge focus now on people traveling domestically. And you're seeing that in terms of the number of folks who are traveling coast to coast to coast, elbows up, they want to support their own country. How are we doing when it comes to our supply of jet fuel?

we're in pretty good shape 85% of the fuel that we consume in Canada the aviation fuel we consume in Canada is in fact refined in Canada so I think we're in pretty good shape if there's any airport in Canada that might be in a situation of fuel shortages it will probably be those airports along the east coast

and maybe even Montreal because some of that fuel does come in from the US the refineries on the northeast coast So there is a high probability. I would not say high, but there is a probability that they might run out of fuel. They'll have lots of notice to give to passengers at that point in time. But from Montreal, West, we're in pretty good shape.

We have pipelines and delivery aviation fuel. We have trains delivery aviation fuel. So we don't have a supply problem. Could we sell some of that fuel to Europe? Would you want to? you know, elbows up. We've had to make sure that we've got to keep our elbows up and making sure that we have enough fuel for us. So, you know, I don't want to be, I don't want to be too proprietary on those, that fuel. But in these situations, let's fuel our Canadian airplanes

before we start fueling European airplanes. You ever seen anything quite like this before? Never. This has never been, this has been historic. I think that the, the crises we've gone through in aviation fuel over the last 80 or 90 years, I've been all. price-related. So we had bumps in prices. We had, you know, the fuel crisis or the oil crisis back in the 70s. You know, we had situations where we had, you know, the financial crisis in the mid-2000s, and that really affected price. This is the first one that really affects supply. And when you start affecting supply, doesn't matter how much you pay, you're not going to get any because there isn't any to be had. How long? A couple of questions left. Just how long do you think it

would take to turn that supply chain back on. If war were to end tomorrow, for example. Yeah, there's a big issue in terms of the damage that's been done to those refineries in the Middle East as a result of Iranian missiles and drone attacks. They were, in fact, starting to attack infrastructure in places like Qatar and in the United Arab Emirates, and that infrastructure was refinery. So there's rumors that there is damage to the Katarian refinery that is a prime supplier of aviation fuel in the marketplace. And we haven't got confirmation of that. But if that refinery is hit or has been hit, we're looking at a couple of years.

A couple of years. Yep, to fix it and get it back into play. Because that's a pretty complicated piece of machinery that we have there. And we don't know the damage. Estimates have been saying that it could be up to a couple of years worth of shortage of aviation fuel until that refinery comes back online. And to those who might be listening who would say, well, this is a an opportunity for us to change how we get around. Just don't fly, that this is a luxury way of

traveling. And that, you know, it's bad for the environment. There's a long list of things that perhaps people would apply to air travel and just say, well, don't fly. What would you say to them? I think that that's an interesting concept. I think we love to fly. You know, I think Canadians and people worldwide like to experience the fact that they can get anywhere in a world by an airplane in 24 hours. There's no place on earth you can hide from an air from a flight. You know, Antarctica, no problem. You want to go to South America? No problem. So Africa, no problem. And so the issue is, you know, people want, have wonderlust. And we've had, you know, COVID shut us down for a year and a half and people, you know, sprang back to flying. So it's going to take, you know, quite a bit of price increases to turn off passengers from flying. That might yet be the case. But I think your point about environmental impact of flying, it is a concern. And the other point is ecotourism. You know, you have places. Europe where you have to start paying. Want to visit the Spanish steps in Rome?

Five euros. You want to go and visit the Coliseum? 10 euros. You want to go to Barcelona? 15 euros. So, you know, each one of these cities have been, you know, affected by over tourism. And I think that, you know, there is a backlash happening in European and Asian cities with that you're looking at, you know, charging people for visits. So that might be another deterrent. Turbulence ahead.

John, thank you very much. All right, Matt. Have a great day. Thank you. is a former Air Canada executive and McGill University faculty lecture, pardon me, in aviation management, talking about what's happening when it comes to not just the price of flights, but also the supply of the fuel that will get you from point A to point B.

This has been the current podcast. You can hear our show Monday to Friday on CBC Radio 1 at 8.30 a.m. at all time zones. You can also listen online at cbc.ca.ca. slash the current or on the CBC Listen app or wherever you get your podcasts. My name is Matt Galloway. Thanks for listening. For more CBC podcasts, go to cbc.ca.ca.ca slash podcasts.