Summer travellers are facing higher ticket prices, route cancellations and deepening uncertainty as the blockade of the Strait of Hormuz drives jet fuel costs to levels not seen before, forcing airlines to cut capacity and pass the burden directly to passengers.
Jet fuel prices had risen by 103% by the end of March compared to the previous month, according to the International Air Transport Association. From a pre-war price of $831 per tonne in late February, European jet fuel reached $1,838 per tonne in early April, a rise of more than 120%. It has since pulled back but remains firmly above $1,500 per tonne.
The consequences are already visible across the industry. Lufthansa has announced the cancellation of 20,000 short-haul flights between now and the end of October in an effort to save 40,000 metric tonnes of fuel and eliminate unprofitable routes. Air France KLM, Air Canada and SAS have also reduced their summer schedules. EasyJet has reported that customers are deferring bookings, with reservations for the rest of the year running below last year's levels.
Europe weeks from potential shortages
The crisis has a clear cause. Some 41% of Europe's aviation fuel passes through the Strait of Hormuz, and the closure of the waterway has sent global supplies plummeting. Market analysts Kpler reported that global jet fuel and kerosene shipments fell below 2.3 million tonnes last week, the lowest level ever recorded. Fatih Birol, head of the International Energy Agency, has warned that Europe is weeks away from running out of supply if the strait does not reopen, and analysts warn that shortages could emerge in some regions within months.
Airlines have moved quickly to ensure passengers absorb the additional costs. United Airlines chief executive Scott Kirby told investors last month that the carrier would do "whatever it takes to recover 100% of the increase in jet fuel prices as quickly as possible." IAG, the group that owns British Airways, Iberia, Aer Lingus, Vueling and Level, has also warned that travellers will have to pay more. A London to Melbourne flight in June now costs 76% more than the same route last year, according to research by consultancy Teneo.
Travellers told to book major hubs
Travel industry figures are advising summer travellers to book through larger airports, warning that shorter and thinner routes will be the first to be axed. A survey by travel trend consultancy Globetrender found that travellers are already adapting their behaviour, delaying bookings and gravitating toward destinations that appear easier, safer or more predictable to reach. "People are still travelling, but they are choosing places that seem more straightforward," said Jenny Southan, the firm's founder.
