Etihad Airways Absorbs Rising Fuel Costs Amid Middle East Competition

Etihad Airways is absorbing increased jet fuel costs rather than raising passenger fares, according to CEO Antonoaldo Neves. Speaking at the Arabian Travel Market, Neves explained that intense competition among Middle East carriers makes it difficult to pass costs to travelers. While oil prices have climbed above $100 a barrel following attacks by the United States and Israel on Iran and tensions over the Strait of Hormuz, ticket prices will only increase if fuel costs remain high for an extended period.

To mitigate these expenses, Etihad is hedging fuel at 60% and automatically passing higher costs to its cargo customers. The airline, alongside rivals Emirates and Qatar Airways, has already adjusted networks and reduced operations in response to closed airspaces and lower demand.

Neves noted that other geopolitical factors have influenced travel more than the regional conflict. He specifically cited tightened visa eligibility and increased fees in the United States and Canada as primary drivers for demand shifts during July and August.