Millions of UK tourists face potential summer flight cancellations due to government measures addressing jet fuel shortages, Britain's largest airports have warned. This comes as the world's biggest oil company, Aramco, cautions that fuel stocks are approaching 'critically low levels'.
Government Rule Change Sparks Concerns
On May 2, Labour introduced a temporary rule change allowing airlines to cancel flights if they can accommodate passengers on other planes with empty seats. This measure permits carriers to reduce flights to conserve fuel without risking their valuable take-off and landing slots, aiming to prevent last-minute cancellations and give passengers advance notice.
The policy responds to Iran's control over tankers transiting the Strait of Hormuz, which has driven oil price surges since the conflict began in February.
However, airport operators, including those at London Heathrow and Gatwick, oppose the plans, fearing disruption, reduced seat availability, and higher fares. They argue that existing rules already allow airlines to cancel flights due to fuel shortages without losing slots the following year. Reports suggest the new adjustment could lead to over 100,000 flight cancellations and tens of millions of seats lost.
Aramco's Dire Warning
Aramco CEO Amin Nasser warned that global jet fuel stocks could hit 'critically low levels' before summer if the Strait remains closed. He stated that the war has triggered the largest energy shock in history, with market recovery potentially extending into 2027, even if the blockade ends soon.
Nasser noted that the loss of key fuels is 'rapidly accelerating', with petrol and jet fuel declining fastest. Since the war began, the world has lost one billion barrels of oil supplies, with an additional 100 million barrels lost each week the Strait stays closed. Global inventories, described as 'the only buffer available', have been 'materially depleted'.
Airline Responses to the Crisis
European airlines are adjusting to the jet fuel crisis:
- Aegean Airlines: Expects a 'notable impact' on first-quarter results due to suspended Middle East flights and fuel price spikes.
- Air France-KLM: Anticipates a $2.4 billion (£1.8 billion) increase in its fuel bill this year, downgrading capacity outlook to 2-4% growth from 2025. Long-haul ticket prices will rise by €50 (£43) per round trip. KLM will cancel 160 European flights in the coming month.
- EasyJet: Warns of a larger half-year pre-tax loss of £540-560 million, including £25 million in extra fuel costs in March.
- IAG: The British Airways owner will raise ticket prices to reflect higher jet fuel costs, despite fuel hedges providing some protection.
- Lufthansa: Introduced an 'Economy Basic' fare limiting carry-on bags to a laptop bag or small backpack. The group will remove 20,000 short-haul flights through October, saving about 40,000 metric tons of jet fuel.
- SAS: Cancelled 1,000 flights in April due to high oil and jet fuel prices, following a 'couple hundred' cancellations in March.
- TAP: Price hikes will partially offset fuel price impacts on revenue.
- TUI: Cut full-year underlying profit outlook and suspended revenue guidance, citing €40 million (£35 million) in extra costs from the war in March.
- Turkish Airlines and Lufthansa (SunExpress): Imposing a temporary fuel surcharge of €10 (£9) per passenger on Turkey-Europe routes. Turkish Airlines will not distribute dividends from 2025 net profit to preserve cash.
- Virgin Atlantic: Adding fuel surcharges but still struggles to return to profitability this year.
- Volotea: Introduced a pricing policy linking ticket prices to fuel costs, potentially adding a post-purchase surcharge of up to €14 (£12) per passenger per flight.
Flight Cancellation Statistics
Data from Cirium shows 13,005 flights planned for May were axed between April 10 and April 21, representing 1.5% of scheduled flights. Paul Charles of The PC Agency warned that 10% of flights could be at risk in June if oil supplies remain squeezed, equating to about 85,000 cancellations.
Fare Drops Amid Uncertainty
Some airlines are cutting prices to boost summer bookings, as tourists delay purchases due to cancellation fears. Between April 9 and May 6, fares for week-long July trips dropped for 27 of the top 50 European routes, with declines of 10% or more on 15 routes, including Heathrow to Nice (up to 44% drop on Milan to Madrid).
Heathrow Passenger Numbers Decline
Heathrow reported a 5.3% drop in passenger numbers in April, with 6.7 million passengers versus 7.1 million a year earlier, reflecting the Middle East conflict's impact. However, the airport noted resilient underlying demand, with increased hub traffic to Asia and the Pacific.
IAG warned that if the conflict continues to restrict crude oil and jet fuel flows, 'there is the potential for supplies of jet fuel to be restricted on a global basis.'
A spokesperson for Airports UK, representing over 50 airports, stated: 'We are supportive of government efforts to plan for future contingencies. But we are not there yet and supply is not an issue. Our view is that the existing mechanisms will suffice for the time being.'
The Department for Transport declined to comment but previously stated: 'UK airlines are clear that they are not currently seeing a shortage of jet fuel. Aviation fuel is typically bought in advance and airports and suppliers keep stocks of bunkered fuel to support their resilience. We continue to work with fuel suppliers, airports, airlines and international counterparts to keep flights operating. We are also consulting on measures to help airlines plan realistic flight schedules which will avoid last-minute disruption and protect holidays.'
