Deputy Governor Dave Ramsden told the UK Parliament's Treasury Committee on Tuesday that airlines may have shielded customers by hedging against higher oil prices and absorbing other expenses instead of passing them through. He cautioned that the calm on ticket prices "since the US-Iran war broke out can't go on." He also noted "some companies saying we're going to have to reduce the number of flights in the autumn," adding that fewer seats means scarcity that "may put the price up."
Governor Andrew Bailey struck a wary tone on energy, saying costs "could be higher still." He and Ramsden highlighted widening crack spreads, where refined fuels such as jet and diesel have been rising faster than crude. As Bailey put it, "We consume the products of barrels of oil, and the crack spread obviously is really the wedge between the crude price and the refined products prices, and that spread has increased." The pair also cited tight global refining capacity, pointing to Ukrainian attacks on Russian infrastructure and delayed maintenance that has been pushed back at key refineries.
Official inflation figures indicate airfares were down 12% in July from a year earlier, following modest increases in the two months before July. Ramsden's comments suggest that softer prices may not last if capacity is trimmed or if carriers start passing through more of their cost base.
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If airlines cut flights into autumn while fuel costs stay sticky, the easy wins on ticket prices could fade. That does not mean panic booking, but it is a reminder to budget for travel with a bit more wiggle room and to watch how energy filters into everyday costs, not just your gas tank.
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