Since the US and Israel began strikes on Iran in February, jet fuel costs have surged, more than doubling as disruptions around the Strait of Hormuz choke a key route used by roughly one in five oil and gas tankers. IATA data show jet fuel in Europe climbed from about €68.27 ($80) per barrel in February to roughly €153.84 ($180) by the end of April. Fuel typically makes up 25% to 50% of an airline’s operating expenses; sustained high prices could push carriers that did not hedge into insolvency.
A supply squeeze compounds the price shock. The International Energy Agency says Europe has only about six weeks of jet fuel stocks. Daily European consumption is around 1.6 million barrels, domestic refining produces roughly 1.1 million, and about 500,000 barrels per day historically arrived from the Middle East through the Strait of Hormuz—flows that are now largely interrupted.
Airlines are responding by shifting costs to passengers and reducing capacity. Air France-KLM has reportedly added a €100 fuel surcharge on long-haul routes. Lufthansa announced plans on April 22 to cut some 20,000 short-haul flights over the next six months; Scandinavian Airlines expects to cancel about 1,000 flights. “We are obliged to do so, because otherwise we just are bankrupt in a few months,” Sebastien Justum, senior vice president at Air France-KLM, told the European Parliament.
Ticket prices are rising: a Teneo advisory report finds airfares up about 24% year-on-year. Consultants warn that, even if current supplies hold, uncertainty about future availability and the higher cost of filling tanks are pushing fares up, removing discounted seats and shrinking overall seat capacity.
Industry groups and EU bodies are urging emergency, temporary measures. Airlines for Europe (A4E), representing 16 carriers and roughly 80% of European traffic, has asked the EU to relax anti-tankering rules that require flights to load at least 90% of needed fuel within the bloc—rules intended to discourage refueling in jurisdictions with weaker environmental standards. A4E also wants a temporary suspension of airlines’ obligations under the EU Emissions Trading System to ease immediate cost pressure.
Airports Council International (ACI) is calling for alternative suppliers, coordinated joint procurement among member states, and better supply coordination. ACI warns the combination of steep prices and a possible supply shock could threaten many regional airports, though most major European airports are not yet facing immediate shortages.
European Commission President Ursula von der Leyen said the bloc’s fossil-fuel import bill rose by more than €27 billion in the 60 days following the outbreak of hostilities and pressed for stronger coordination of fuel reserves, covering jet fuel and diesel. The Commission launched the AccelerateEU plan to track jet fuel stocks and coordinate supplies for airlines and airports. Industry advocates note an EU-wide fuel observatory that maps available supplies and optimizes distribution is already operating and is a welcome step.
Experts caution, however, that better coordination only reallocates existing supplies; it cannot create fuel that isn’t there. “It can stop a national-level shortage becoming a continent-wide panic, but it cannot create fuel that isn’t there,” said Marina Efthymiou, an aviation management professor at Dublin City University.
Refined fuel exporters are also holding back more product. Much jet fuel is refined in Asia, with South Korea a leading exporter, but some refiners are cutting exports because their crude supplies, too, rely on Middle Eastern shipments that are now at risk.
EU officials are trying to prepare for severe disruption without spooking travelers. Apostolos Tzitzikostas, European Commissioner for Sustainable Transport and Tourism, said authorities must plan for worst-case scenarios while avoiding alarmist messages that would deter bookings and risk precipitating an economic slump.
Industry requests for temporary regulatory relief, coordinated procurement and improved supply mapping aim to protect airlines, airports and travelers in the near term. But if the conflict and blockade of key shipping lanes persist, higher fares, fewer flights and mounting pressure on regional airports are likely to continue. Edited by: Carla Bleiker