The International Air Transport Association (IATA) said jet fuel prices are expected to be around 70 per cent higher throughout 2026 following the closure of the Strait of Hormuz, one of the world's most important shipping routes for oil exports.

The surge in costs is expected to have a major impact on airline profitability, with IATA forecasting that collective industry profits worldwide will fall by almost half to $23 billion.

Industry leaders warned that while airlines remain profitable overall, some carriers could struggle to cope with the scale of the fuel price shock.

Willie Walsh, IATA's Director General, said: "High oil prices will inevitably mean higher ticket prices. There's just no way to avoid that."

Speaking at IATA's annual summit in Rio de Janeiro, Walsh said airlines were facing a difficult period as they attempt to balance rising operating costs with consumer demand.

He said: "It's a challenging and unpredictable time."

Walsh added: "It's going to be very challenging and for a lot of airlines the increase in the fuel bill is potentially existential."

Despite the financial pressure, he stressed that the industry was not facing a crisis on the scale of the COVID-19 pandemic.

Walsh said: "You're looking at an industry that is still profitable and still forecasting growth. Traffic is up 2%. If you factor out the impact on the Middle East for the rest of the world it remains a pretty positive environment."

He also suggested that travellers appear prepared for higher prices, with industry research indicating that many passengers would continue to fly even if fares increased alongside oil prices.

Walsh said: "The big unknown is how long travellers and shippers can tolerate the higher costs of connectivity."

British Airways believes long-haul and premium passengers could feel the biggest impact from rising costs.

Sean Doyle, Chief Executive of British Airways, said: "There would be no getting away from it - if fuel goes up, fares have to go up."

However, Doyle suggested that airlines may be more cautious about raising prices on short-haul leisure routes where customers are particularly price sensitive.

The warning comes as more British and European holidaymakers choose destinations closer to home amid continuing uncertainty surrounding the Middle East.

Industry data suggests travellers are increasingly opting for breaks within Europe rather than venturing further afield through Gulf hub airports.

At the same time, airlines have raised fresh concerns about the European Union's Entry/Exit System (EES), which is due to be fully implemented later this year.

The biometric border scheme will require most non-EU travellers entering the Schengen Area to provide fingerprints and facial images, prompting fears of lengthy queues at airports across the continent.

Rafael Schvartsman, IATA's Vice-President for Europe, said: "I think Europe needs to be much more honest about where we are."

He added: "Normally, we would process a passenger in 20 to 25 seconds, and you're already stipulating that it will take 90 seconds, and on top of that you have unreliability of the systems. The probability that people will be waiting in lines for a long time is very, very high."

Schvartsman warned that the new system could create significant disruption for destinations heavily reliant on British tourism.

He said: "For most of the Mediterranean, the British are the No 1 incoming tourist - that is a major concern."

While Greece has already announced that it will not currently carry out EES biometric checks on British visitors, Schvartsman argued the challenge extends beyond any single nationality.

He said: "We also have high demand for American carriers already putting extra flights to European destinations during the summer. You will have an influx of US citizens too."

The comments come as airlines prepare for what is expected to be another busy summer season, while navigating rising fuel costs, evolving border procedures and changing travel habits among holidaymakers.