Air travel has suffered a severe blow since the Iran war began in February, with thousands of flights grounded, airlines cutting two million seats from May schedules, and experts warning that the jet fuel shortage could derail summer holiday plans. This pattern mirrors the pandemic-era collapse in 2020, but AirAsia chief executive Tony Fernandes declares the current crisis even more severe.
Fuel Crisis Exceeds Pandemic Impact
Fernandes told the Financial Times: 'I thought I'd seen it all with Covid... but having seen jet fuel go up almost three times — this is much worse. You wake up one day and your major cost has tripled — it was quite a new experience for me and I've been through a lot in my life.'
The closure of the Strait of Hormuz has driven jet fuel prices to unprecedented levels, forcing airlines to ground planes and cut capacity. This has triggered a shift toward domestic holidays, reminiscent of the staycation boom during the pandemic.
UK Staycation Demand Surges
Butlin's has reported 'significant growth in demand for staycations driven by the conflict,' with May Half Term and summer school holiday bookings up over 20% year-on-year. CEO Jon Hendry Pickup told the Daily Mail: 'It does feel that there's been a significant growth in demand for staycations driven by the conflict. We were at full capacity across our three resorts for the Easter break. Late demand was up significantly which suggests that guests were holding off booking overseas holidays, perhaps hoping for a swift resolution, before ultimately deciding to stay in the UK.'
UK retreat specialist Together Travel has also seen a 'noticeable increase' in demand for domestic breaks. Managing director Laura Dubois said: 'There's a clear sense that travellers are looking for reassurance, flexibility and reliability when planning holidays, and that naturally brings many people back to domestic destinations.' Popular spots include the Yorkshire Dales, Lake District, North Wales, Norfolk, and the South West.
Fuel Costs Drive Up Holiday Prices
Petrol prices for retailers have hit their highest level since the Iran war began, with drivers paying an additional £500 million for petrol and £1.5 billion for diesel. This could push up the cost of UK holidays, as seen during the pandemic when prices surged by up to 100%.
PoB Hotels CEO Kalindi Juneja noted: 'While this is not on the scale of the pandemic, we are certainly seeing travellers reconsider overseas plans and look closer to home amidst ongoing disruption and uncertainty around international travel. The UK is incredibly well positioned for this, with everything from coastal escapes in Cornwall, Devon and Jersey to relaxing countryside breaks in the Cotswolds and Scotland all seeing strong interest.'
Inbound international guests are exploring off-the-beaten-track locations such as the Outer Hebrides and Scottish Highlands, while domestic travellers favour coastal and countryside escapes. The trend toward shorter, more frequent luxury breaks is also continuing, with many bookings coming later as travellers monitor global events.
