Europe is facing a jet fuel shortage with only six weeks of supply left, a result of the ongoing conflict in the Middle East. The International Energy Agency (IEA) Executive Director, Fatih Birol, cautioned that flight disruptions could escalate if oil flow remains hindered due to the Iran war. Birol emphasized the critical situation, labeling it as “the largest energy crisis we have ever faced.”
Asian countries like Japan, India, and China, heavily reliant on Middle Eastern oil, are particularly vulnerable to the fuel crisis. Birol warned that the impact would soon reach Europe and the Americas. The IEA director highlighted the possibility of flight cancellations between cities if the supply chain through the Strait of Hormuz remains blocked.
Several airlines are already feeling the effects, with Swedish carrier SAS announcing the cancellation of 1,000 flights in April due to soaring fuel prices. Similarly, United Airlines and KLM have scrapped flights, with the former planning to cancel 5% of flights in the upcoming quarters. South Korean airline Asiana and Hong Kong-based Cathay Pacific are also reducing flight frequencies to cope with rising fuel costs.
Lufthansa, the German airline group, has expedited the grounding of 27 planes operated by its CityLine subsidiary, attributing the decision to escalating jet fuel prices. Vietnam Airlines is set to cancel 23 domestic flights weekly starting in April, while Air New Zealand plans to cut back on flight operations over the next two months, affecting approximately 1,100 flights.
Norse Atlantic Airways has already removed all summer flights to Los Angeles International Airport from its schedule due to the fuel shortage. Despite concerns raised by major airlines such as British Airways, Ryanair, and easyJet regarding potential ticket cost increases, flight schedules remain intact for now. British Airways recently discontinued its route from London Heathrow to Jeddah due to shifting demand dynamics.
EasyJet, facing a £25 million increase in jet fuel costs last month due to the Middle East conflict, anticipates reporting significant losses for the first half of the year. The airline attributes the uncertainty around fuel costs and customer demand to the ongoing conflict, resulting in a drop in bookings for the upcoming months compared to the previous year.
Following the announcement of anticipated losses, easyJet’s shares experienced a notable decline during early Thursday trading. Despite this setback, the airline reassured passengers that airport operations and fuel supply chains are functioning normally, providing visibility on jet fuel supplies until mid-May.
