Global jet fuel costs and supplies are under pressure from the U.S. and Israel’s war against Iran.
Some major airlines are canceling flights in response.
One airline executive described fuel prices as the toughest challenge facing his business.
First, the war made flights more expensive. Now, it makes them disappear.
The U.S. and Israeli war against Iran has disrupted supply chains, leaving oil trapped in storage facilities across the Middle East.
That sent Brent crude prices soaring above $100 a barrel in early March, only to fall back below that benchmark this month after ceasefire talks began. At Friday’s close, the price was $92.42.
Jet fuel prices rose even faster, doubling to nearly $200 a barrel. As the war dragged on, it became increasingly difficult to obtain aviation fuel for countries that did not produce it or had limited supplies.
“In Europe, we probably have about six weeks of jet fuel left,” International Energy Agency executive director Fatih Birol told The Associated Press on Thursday.
He added that if the Strait of Hormuz was not open, flights would be canceled due to fuel shortages.
Several airlines have canceled flights or grounded aircraft due to rising costs.
June Goh, senior oil market analyst at Sparta Commodities, said in an article on X that jet fuel requires specialized storage, which means less storage than other products such as gasoline.
“Travel in Asia has become more expensive, with many airlines adding fuel surcharges or outright canceling flights,” she wrote. “Europe is facing a looming aviation fuel supply shortage. Be prepared.”
Here are some airlines that have started canceling flights due to rising prices and falling supply.
Ryanair, Europe’s largest airline, said it was considering reducing routes.
Chief executive Michael O’Leary told Sky News its jet fuel supplies could be at risk if the war continues.
“We don’t expect any disruptions before early May, but we do face the risk of supply disruptions in Europe in May and June if the war continues,” he said.
KLM said on April 17 that it would cancel 80 return flights from its main base Amsterdam Schiphol Airport.
It added that the routes were “no longer economically viable” due to rising kerosene costs. The airline also clarified that there was no shortage of kerosene.
On the same day, Lufthansa announced that it would retire dozens of aircraft early due to rising jet fuel prices and labor disputes.
Most of the planes were Air Canada CRJ aircraft, which shuttered its loss-making regional subsidiary Lufthansa CityLine.
KLM aircraft at Amsterdam Schiphol Airport.Patrick van Katwijk/Getty Images
Swiss airline Edelweiss also said it would cancel flights to the United States due to falling demand and rising fuel prices. There will no longer be flights to Denver or Seattle, and flights to Las Vegas will be reduced.
A spokesman for Scandinavian Airlines said the airline will cut about 1,000 flights in April due to soaring jet fuel costs.
Most of the canceled flights were on short-haul routes in the Nordic region, which have multiple daily flights from airports, they added.
Several airlines in Asia said they would cut flights to ease fuel shortages and rising costs.
According to Reuters, Vietnam Airlines has suspended seven domestic routes starting from April 1. The media reported that Vietnam Airlines plans to cut flight volume by 10% to 20% per month in the next financial quarter if aviation fuel prices rise to US$160 to US$200 per barrel.
Other local airlines, including Vietjet Air and Bamboo Airways, will also cut flights.
AirAsia said it has cut 10% of its flights and raised fares to curb the impact of rising fuel costs. The Malaysian budget airline, which flies to 25 countries, added that it would cut capacity on routes where it cannot cover fuel costs.
At a media briefing on April 6, CEO Bo Lingam said fuel surcharges have increased to 20% and overall fares have increased by 30% to 40%.
Lingam said its jet fuel has risen to $200 a barrel from $90 before the war, calling it the airline’s most serious challenge.
United CEO Scott Kirby said in a memo to employees in March that the airline would cut flights over the next two quarters.
“In the short term, this means tactically cutting back on temporarily unprofitable flying operations amid high fuel prices,” Kirby said.
The airline plans to cancel some off-peak and red-eye flights.
“If prices stay at this level, it would mean an additional $11 billion a year in spending on jet fuel alone,” Kirby said in a message to employees posted on the company’s website. “To put things in perspective, in United’s best ever year, we made less than $5B in revenue.”
Delta has not officially announced any flight cuts due to rising fuel prices; the refinery it owns in Pennsylvania has provided it with a buffer during the crisis.
“It won’t completely close the cracks, but it will provide us with a pretty substantial hedge,” Delta CEO Ed Bastian said at a JPMorgan conference in March.
Delta Air Lines is cutting its seasonal route from Los Angeles to Anchorage this summer, telling Business Insider it is “adjusting its schedule to accommodate customer demand.” Alaska Airlines will be the sole operator on the route.
Air New Zealand said it would cut about 5% of its flights, or about 1,100 flights, in early May.
“For example, we are focusing on consolidating flights at off-peak flight times or having other alternatives to reschedule passengers,” CEO Nikhil Ravishankar told local outlet 1News in March.
Air Canada said it will suspend some routes starting in late May due to rising jet fuel costs.
“Aviation fuel prices have doubled since the outbreak of the conflict in Iran, impacting some less profitable routes and flights that are now no longer economically viable,” the company said in a statement. “In response, we are adjusting our schedule, including reducing some frequencies.”
The route suspensions will affect certain Canadian domestic, cross-border and international flights.
