️ The closure of the Strait of Hormuz is wreaking havoc on global aviation, with jet fuel shortages and soaring prices forcing airlines to slash schedules. Germany's largest carrier, Lufthansa, announced on Tuesday it would cancel 20,000 short-haul flights between May and October to conserve fuel. The airline said the cuts would save approximately 40,000 metric tons of jet fuel, the price of which has doubled since the outbreak of the Iran conflict.
️ Dutch airline KLM last week canceled 160 flights for the coming month, while other carriers across Europe and the Asia-Pacific region are raising prices and bracing for mass cancellations as the summer holiday season approaches. Fatih Birol, executive director of the International Energy Agency, recently warned that Europe has as little as six weeks of jet fuel supply left.
️ EU Energy Commissioner Dan Jørgensen said the crisis is moving from one of high prices "towards a crisis of supply." He noted that member states are exploring the possibility of sharing jet fuel stocks to maintain air travel. However, the Dutch government estimated that the EU has enough kerosene for at least five months.
️ Rico Luman, senior transport economist at ING, told DW that the six-week estimate could prove accurate and that EU plans for fuel sharing may need to be implemented. But John Grant, chief analyst at OAG, doesn't see the situation as "dire," noting that many canceled flights are on routes with frequent alternatives.
️ EU transport ministers met Tuesday to discuss contingency plans. The European Commission will present a package of energy and transport measures on April 22, including collective management of jet fuel stocks and potential distribution among member states. Another measure under consideration is allowing member states to buy more jet fuel from the US.
️ The crisis highlights airlines' vulnerability to supply shocks, especially in Europe and Asia, which rely heavily on kerosene from the Middle East. A November 2024 IATA report warned that "Europe's jet fuel supply resilience has weakened as reliance on imports grows." While the EU's ReFuelEU regulation mandates increased use of sustainable aviation fuel (SAF), low supply and high costs remain obstacles.
️ Experts say the only realistic short-term fix is reducing fuel consumption, which will lead to more cancellations and inevitable price hikes. Asian carriers like Cathay Pacific, Air New Zealand, and Air Asia X have already cut routes to save fuel, and fuel levies are being introduced industry-wide.
Source: www.dw.com