Flight price rises due to 'foolish leaders' starting wars, Virgin's Branson says
Middle East tensions have choked the production and transportation of oil, causing a surge in the price of car and jet fuels.
Flight prices are rising because of “foolish leaders” who start wars, Virgin founder Branson says
Virgin Group founder Sir Richard Branson has blamed higher flight prices on “foolish leaders” starting wars, in a barely disguised reference to the US-Israel conflict with Iran.
Tensions in the Middle East have restricted the production and movement of millions of barrels of oil, pushing up the cost of car and jet fuel, both of which are derived from oil.
In May, Virgin Atlantic responded by adding a fuel surcharge to ticket prices.
US President Donald Trump has repeatedly argued that the conflict is needed for long-term peace and security.
But Sir Richard said there was “no need” for the war.
“The Iran conflict was completely unnecessary. There was a nuclear agreement between Iran and the rest of the world that had been negotiated by President Obama and a lot of European people.
“It was working, so there was no need to rip it up... And this war has just resulted in much higher oil prices all over the world. And inflation has been one of the consequences.”
The European benchmark jet fuel price had been around $800 (£590) a tonne, but surged after the outbreak of the Iran war, peaking at more than $1,800 in April. It has since fallen to about $1,450.
Virgin Atlantic chief executive Corneel Koster told the BBC that fuel surcharges were “absolutely required” at “this level of fuel price”, adding that it is “hard to be optimistic at this moment about the situation in the Middle East”.
Virgin’s surcharge added £50 to an economy fare, £180 to premium, and £360 to business class.
Several of Virgin’s competitors cut flights as well as raising fares after the conflict began.
In April, analysis by consultancy firm Teneo found that the Iran war had caused a 25% rise in air fares.
And this week Ryanair said it would cut its winter schedule because of higher fuel prices and warned that European short-haul fares would “increase materially” if jet fuel prices keep rising until next summer.
Even so, Koster said Virgin did not intend to make any major changes to its winter schedule.
He said winter capacity had already been slightly reduced a few months earlier and added that if demand was weak on certain routes “in the depths of winter”, there would be some trimming or “capacity discipline”, but not “big percentages”.
The airline expects to operate 95% of its normal schedule.
Sir Richard was speaking to the BBC as Virgin Atlantic announced it had won a contract to fly Team GB and ParalympicsGB to Los Angeles for the Summer Olympics in 2028.
The airline won the contract from rival British Airways, which had held it since the 2008 games in Beijing.