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Rising Oil Prices Impact Air Fares: A-level Business In the News

Mike Mills

23rd April 2026

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Conflict in the Middle East contributes to a sharp rise in air fares.

Airspace restrictions have forced airlines to take longer routes, increasing the amount of jet fuel consumed on each flight. Cheapest economy tickets now cost around 24% more on average than a year ago.

Disruption to oil supplies in the region has fuel costs, from $85–$90 to $150-$200 per barrel. Fuel makes up around one quarter of an airline's total operating costs.

The impact has been felt most severely on routes between Europe and East Asia, with some fares more than 70% higher than last year.

A reduction in capacity on long-haul routes has further impacted prices. Although some airlines have offered additional services, the total number of seats available on many routes remains below normal.

Fewer seats combined with higher costs means airlines have had little choice but to pass on price increases to passengers.

Several UK airlines, including EasyJet, Ryanair and British Airways, have proposed a cut in Air Passenger Duty (APD), a tax levied on passengers for each flight they take.

Airlines have also requested that delays and cancellations caused by fuel shortages be reclassified so they are not required to pay compensation to passengers whose flights are delayed or cancelled.

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Mike Mills

Mike is an experienced Head of Department, teacher and A-level Business examiner. Mike is also a popular presenter on tutor2u CPD courses and student workshops.