Jet fuel prices have more than doubled since the US and Israel first attacked Iran in February, driven largely by disruptions to the Strait of Hormuz, a key route for about a fifth of the world’s oil and gas tankers. In Europe, jet fuel rose from roughly €68.27 ($80) per barrel in February to about €153.84 ($180) by the end of April, according to the International Air Transport Association (IATA). Fuel typically represents 25% to 50% of an airline’s operating costs, and sustained high prices could push carriers that have not hedged into bankruptcy.
Beyond price inflation, a supply crunch looms. The International Energy Agency warned that Europe has roughly six weeks of jet fuel left. Europe consumes about 1.6 million barrels of jet fuel daily and produces around 1.1 million domestically; roughly 500,000 barrels a day previously came from the Middle East via the Strait of Hormuz, which is now largely impassable.
Airlines are passing higher fuel costs to passengers and cutting capacity. Air France-KLM has imposed a reported €100 surcharge on long-haul flights. Lufthansa announced on April 22 that it would cut 20,000 short-haul flights over the next six months; Scandinavian Airlines plans 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.
Airfares have risen about 24% year-on-year, according to a Teneo advisory report. Aviation consultants warn that while current fuel supplies are holding, uncertainty about future availability and the higher cost of keeping aircraft tanks full are pushing ticket prices up and reducing seat availability and discounts.
Industry groups and EU institutions are pressing for emergency and temporary measures. Airlines for Europe (A4E), representing 16 carriers and around 80% of European air 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 designed to discourage refueling in lower-environmental-standard jurisdictions. A4E has also urged a temporary suspension of the EU’s Emissions Trading System obligations for airlines to ease immediate cost pressures.
Airports Council International (ACI) has called for sourcing jet fuel from alternative suppliers, joint procurement by EU member states and greater coordination. ACI warns that the combination of high prices and the threat of a supply shock could be existential for many regional airports, though most 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 just 60 days of the conflict and stressed stronger coordination on fuel reserves, including jet fuel and diesel. The Commission launched the AccelerateEU plan to monitor jet fuel stocks and coordinate supplies to airlines and airports. Aviation Advocacy’s managing director noted that an EU-wide fuel observatory mapping available supplies and optimizing distribution is already operating and is a welcome step.
But experts caution coordination can only manage distribution, not create absent fuel. “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.
Exporters of refined jet fuel are also retaining more of their own output. Much of the world’s jet fuel is refined in Asia — South Korea is a leading exporter — but some Asian refiners are curbing exports because their crude oil supplies also come from the Middle East and are under threat, reducing export availability.
EU officials are trying to strike a balance between preparing for severe disruption and avoiding alarm. Apostolos Tzitzikostas, European Commissioner for Sustainable Transport and Tourism, said authorities must prepare for worst-case scenarios without sending panic-inducing messages that would deter travelers. He warned that if tourists and citizens lose confidence to book holidays, an economic crisis could arrive sooner than expected.
Industry calls for temporary regulatory relief, coordinated procurement, and better mapping of supplies aim to shield airlines, airports and travelers in the near term, but if the conflict and the blockade of key shipping lanes persist, higher fares, fewer flights and strain on regional airports are likely to continue. Edited by: Carla Bleiker