Europe Faces Flight Crisis as Iran War Doubles Jet Fuel Costs

Massive Flight Cuts Hit European Airlines

German aviation giant Lufthansa Group announced it would cut 20,000 short-haul flights through October as the Iran war drives up oil prices and deepens worries that some countries may run low on jet fuel. The airline said it would cancel less profitable routes and focus on flights to and from its hub airports in Frankfurt and Munich, which could save approximately 40,000 tonnes of jet fuel.

"That's massive," said Rico Luman, a senior economist for ING Research based in Amsterdam. The reduction amounts to less than 1% of the group's available seat kilometers but targets unprofitable short-haul routes at two of its six European hubs. The schedule cuts come five days after the group confirmed it would permanently ground the 27-aircraft fleet of Lufthansa CityLine as part of broader cost-reduction measures.

Besides Lufthansa, major carriers including Delta Air Lines, United Airlines, American Airlines, Air Canada, Emirates, Qatar Airways, Air China, British Airways and Air France-KLM have canceled scheduled May flights spanning every major region. Air New Zealand is consolidating about 4% of its schedule in May and June, saying "Like airlines globally, we're experiencing jet fuel prices that are more than double what they would usually be."

War Disrupts Global Energy Supplies

The fuel crisis has been caused by the ongoing standoff between the United States and Iran in the Strait of Hormuz, the vital waterway where one-fifth of the world's oil and liquefied natural gas supplies are normally shipped. The price of jet fuel has more than doubled in certain markets since the US-Israeli war on Iran began in late February, with global jet fuel prices increasing from about $99 per barrel at the end of February to as high as $209 a barrel at the beginning of April.

European aviation companies are particularly affected by fuel price increases as jet fuel is one of their most significant expenses, and they rely heavily on imports from the Middle East. Around 75 per cent of Europe's jet fuel imports come from the region, making any prolonged disruption especially challenging.

Last week, the head of the International Energy Agency, Fatih Birol, warned that Europe has "maybe six weeks or so [of] jet fuel left," warning of possible flight cancellations "soon" if oil supplies remained halted. EU Energy Commissioner Dan Jørgensen said the war is costing Europe around 500 million euros ($600m) each day, adding that EU governments "are very worried" about lasting jet fuel shortages.

Rising Costs Hit Travelers Hard

For travelers, this is already translating into fewer flight options on some routes and higher fees and fares heading into the peak summer season, with many airlines raising checked bag fees or adding fuel surcharges. Several major airlines – including JetBlue, United, Delta and Southwest – have raised baggage fees in recent weeks, with experts noting "We're seeing airfare increase across the board, from the full-service airlines to the budget carriers."

European travelers should expect to have fewer options during the peak summer vacation season in July and August. "I'm afraid there's no quick fix for this, because we've seen the damage [to] the infrastructure in the energy sector in the Middle East. So we expect oil prices to remain high for longer, at least until the end of this year."

Industry Braces for Extended Crisis

The European Union's top energy official is warning that the energy crisis sparked by the war could impact prices for months, "or maybe even years" to come. As U.S. carriers continue to report their first-quarter earnings, the uncertainty around fuel costs is showing up in their financial outlooks, with several carriers either slashing their full-year forecasts or holding back on updating them.

European airlines might be preparing to make deeper cuts to their schedules as well, with analysts suggesting "This could be the start of more announcements." The aviation industry's heavy reliance on Middle Eastern fuel supplies has exposed a critical vulnerability that could reshape travel patterns across Europe for months to come, potentially making summer vacations more expensive and harder to book than travelers have experienced in years.