Jet fuel costs and supplies are under pressure worldwide due to the US and Israeli war on Iran.
Some major airlines are canceling flights in response.
One airline executive described fuel prices as the most serious challenge facing his business.
First, the war made flights more expensive. Now, it’s making them disappear.
America’s and Israel’s wars against Iran have disrupted supply chains, stranding oil in storage facilities in the Middle East.
It saw the price of Brent crude rocket past $100 a barrel in early March, before sinking below that benchmark after ceasefire talks began this month. On Friday, the market closed at $92.42.
Jet fuel prices have risen even faster, doubling to nearly $200 a barrel. And as the war progresses, jet fuel is becoming harder to come by for countries that don’t produce or have limited supplies.
“In Europe, we have six weeks or so of jet fuel left,” Fatih Birol, executive director of the International Energy Agency, told The Associated Press on Thursday.
He said that if the Strait of Hormuz is not opened, the flight will be canceled due to lack of fuel.
Many airlines have canceled flights or grounded planes due to rising costs.
Jun Goh, senior oil market analyst at Sparta Commodities, said in a post on X that jet fuel requires special storage, which means less storage than other products like gasoline.
“Travel in Asia has become more expensive, with many airlines adding fuel surcharges or canceling flights,” she wrote. “Europe Faces Imminent Jet Fuel Supply Shortage. Brace Yourself.”
Here’s a look at some of the airlines that have begun canceling flights due to rising prices and dwindling supplies.
Europe’s largest airline, Ryanair, has said that it is considering reducing routes.
CEO Michael O’Leary said in an interview with Sky News that its jet fuel supply could be at risk if the war continues.
“We don’t expect any disruptions until early May, but if the war continues, we run the risk of supply disruptions in Europe in May and June,” he said.
KLM said on 17 April that it was canceling 80 return flights from Amsterdam’s Schiphol Airport, its main base.
It added that these routes are “no longer economically viable” due to rising kerosene prices. Airlines have also made it clear that there is no shortage of kerosene.
On the same day, Germany’s Lufthansa announced that it would retire dozens of aircraft ahead of schedule due to rising jet fuel prices and the impact of a labor dispute.
Most of the planes are Canadian CRJ aircraft, as it has shut down loss-making regional subsidiary Lufthansa Cityline.
KLM planes at Amsterdam Schiphol Airport.Patrick van Katwijk/Getty Images
Switzerland’s Edelweiss Air also said it had canceled flights to the US due to falling demand and rising fuel prices. It will no longer fly to Denver or Seattle, and will reduce the frequency of flights to Las Vegas.
A spokeswoman for Scandinavian Airlines said it would cut around 1,000 flights in April due to a rise in jet fuel prices.
They added that most of the canceled flights were on short-haul routes in the Nordic region, to airports with multiple daily flights.
Many airlines in Asia have said they will cut flights to ease fuel shortages and rising costs.
Vietnam Airlines has suspended seven domestic flight routes since April 1, a local state-run newspaper reported, according to Reuters. The outlet reported that Vietnam Airlines plans to reduce flight volume by 10% to 20% per month in the next financial quarter if the price of jet fuel rises from $160 to $200 per barrel.
Other local airlines, VietJet Air and Bamboo Airways, will also cut flights.
AirAsia has cut its flights by 10 percent and increased fares to counter the impact of rising fuel prices. The Malaysian low-cost carrier, which flies to 25 countries, has added capacity cuts on routes that cannot meet fuel costs.
In a media briefing on April 6, CEO Bo Lingam said that the fuel surcharge has increased by 20%, and the overall ticket price has increased by 30% to 40%.
Lingam said that his jet fuel had risen from $90 a barrel before the war to $200 a barrel and that this was the airline’s most serious challenge.
United Airlines CEO Scott Kirby said in a March memo to employees that the company will cut flights over the next two quarters.
“In the short term, this means strategically cutting flights that are temporarily unprofitable during high oil prices,” Kirby said.
The airline plans to cancel some off-peak flights and red-eyes.
“If prices stay at this level, that means an additional $11 billion in annual spending on jet fuel alone,” Kirby said in a message to employees posted on the company’s website. “For perspective, in United’s best year, we made less than $5B.”
Delta has not officially announced any flight cuts due to fuel prices; An oil refinery in Pennsylvania has given it a buffer during the crisis.
“It’s not going to completely cover the crack, but it gives us a very significant hedge,” Delta CEO Ed Bastian said at a March JP Morgan conference.
Delta is cutting its seasonal Los Angeles to Anchorage route this summer, telling Business Insider that it will “adjust its schedule to align with customer demand.” Alaska Airlines will be the sole operator on that route.
Air New Zealand said it would cut about 5% of its flights, or about 1,100, in early May.
“We are focused on integrating alternative flights during off-peak flight hours, for example, or where we can re-accommodate customers,” CEO Nikhil Ravi Shankar told local outlet 1 News in March.
Air Canada says it will suspend some routes starting in late May due to rising jet fuel costs.
“Jet fuel prices have doubled since the start of the Iran conflict, affecting some less profitable routes and flights that are no longer economically feasible,” the company said in a statement. “Schedule adjustments including any frequency reductions are being made in response.”
The route suspension will affect some domestic Canadian, transborder and international flights.
