You'll want to check the fuel gauge before you go on vacation this summer. Not just yours—theirs.
Rumors of a global jet fuel shortage aren't just industry chatter anymore. Between refinery bottlenecks and the effectively locked down Strait of Hormuz, the aviation world is facing its largest energy crisis in years.
Roughly 20 percent of the world’s oil supply passes through the maritime choke point connecting the Persian Gulf with the Gulf of Oman and the Arabian Sea, which has become a no-go zone because of the escalating conflict. While there's plenty of crude oil in the ground, we’re running out of the refined kerosene that keeps jets in the air.
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Here's what you need to know
This is a fast-moving news event that could change at a moment's notice, depending on how the war goes. But here's what we know:
Six weeks left in the tank. The International Energy Agency warns that Europe may only have about 6 weeks of jet fuel left.
Price hikes. Global jet fuel prices have more than doubled since last year, with Asia seeing a staggering 163 percent jump.
Flight cuts. Carriers like KLM, United, and Air New Zealand are already trimming schedules or adding massive surcharges—some as high as $800 per flight. (We discussed this in today's commentary.)
Secondary airport risk. Smaller regional hubs are most vulnerable because they don't have the massive on-site reserves of major hubs.
Bottom line: This is serious. If you have an upcoming flight, especially to Europe, you should be prepared for the worst.
What to do about the jet fuel crisis?
You don't have to stay home, but you have to be smarter than the average traveler.
Stick to the big players. Larger airlines have the cash to outbid the competition for fuel and the storage capacity to weather a few weeks of dry pumps. If you're flying a low-cost carrier with thin margins, you're at a higher risk of seeing your flight "reorganized" out of existence.
Pay with a credit card. If an airline cancels your flight because it can't afford to fuel the plane, you’re entitled to a full refund. If it goes belly up entirely, the Fair Credit Billing Act is your safety net.
Don't let anyone talk you into a voucher. In a fuel crisis, a voucher for a grounded airline is just a digital souvenir.
What about rebooking you on another airline? Currently, there's no law that requires an airline to rebook you on a competitor if it can't fly. So travel insurance may come in handy.
The takeaway: Book with major carriers and keep a close eye on your flight status 48 hours before departure. If the fuel runs out, make sure it’s the airline’s problem, not yours.
The last word on those pesky surcharges for your "award" tickets
After this morning's commentary on those bothersome surcharges on your "free" tickets, here's the bottom line: You have to stop treating your frequent flier program like a savings account. It's more like a high-interest loan you’ve granted the airline, and right now, the carriers are defaulting.
They’re using the chaos in the Middle East as a smokescreen to jack up "carrier-imposed fees" while their actual fuel costs stay locked in through years of hedging. When British Airways or Lufthansa asks for $1,400 to book a 'free' seat, it isn't rewarding your loyalty. It's insulting your intelligence.
So don’t be a travel lemming. The industry is betting you’re too addicted to your gold status and "free" lounge cookies to notice you’re being fleeced. You don't have to follow the herd off the cliff. Shred the co-branded credit cards and switch to one that pays out cold, hard cash—a currency the airline can’t devalue with a click.
What do you think? Are award tickets worth it?
Don't book that holiday rental until you read this
The unofficial start of summer is just a few weeks away, and if you haven't booked your Memorial Day getaway yet, you're probably looking at your bank account with a bit of trepidation.
But the latest airfare numbers suggest the doom-and-gloom travel headlines may only be half right.
The bad news: A domestic flight is expensive
According to new data from Priceline, the cost of flying within the U.S. for Memorial Day (May 22 to 25) has ticked up. Domestic roundtrip airfare is averaging $347, a 13 percent jump from last year. So if you're heading to popular hubs like Las Vegas, Chicago, or New York, you're going to feel that squeeze at the gate.
Reader Tricia Kalinowski was stunned by a 140 percent price hike for July tickets in just one week. Kalinowski, who was trying to buy tickets from Denver to Portland, Maine, watched the fare jump from $500 to $1,200 for an economy seat on Delta.
"Honestly, I was shocked by how much it went up," she says.
The good news: improbably, international fares are down
There’s a silver lining if you’re willing to dust off your passport. Despite the jet fuel chaos, international airfares from the United States have actually fallen 17 percent year-over-year, averaging just $519 for a roundtrip. Also, Memorial Day isn't observed outside the U.S., so international destinations won't see the usual domestic holiday crowds.
More good news: While domestic hotels have seen a modest 3 percent increase to $222 a night, international stays have dipped slightly, according to Priceline. Even the rental car market is playing nice, with rates holding steady or dropping about 1 percent both here and abroad.
Where are the deals this Memorial Day?
If you're looking for a bargain, you might want to check out Orlando or Dallas, where nightly hotel rates are hovering around $154 to $159. But if you’re chasing the trending crowd, be prepared for a fight—searches for places like San Juan and Sint Maarten are skyrocketing.
The takeaway: Don't let the unofficial start of the summer travel season turn into the official start of your credit card debt. If you’re planning a domestic trip, look for affordable cities that aren't top-of-mind for every other traveler. If you can push your trip to an international destination, you’ll likely more than make up for the flight cost with the savings on the ground. Most importantly, don't wait for a last-minute miracle—holiday prices rarely move in the consumer's favor as the date approaches.
What are you doing?
Where are you headed for Memorial Day — or are you sitting this one out? Our comments are open.