The director general of the International Air Transport Association, Willie Walsh, has warned that airlines will be forced to pass on rising fuel costs to passengers, leading to more expensive holidays. Speaking to the BBC, Walsh stressed that while there is no immediate cause for panic over jet fuel shortages, the long-term impact of the Strait of Hormuz closure will inevitably result in higher ticket prices.
Airlines Cannot Absorb Costs
Walsh explained that airlines are unable to continue absorbing the additional costs caused by the disruption. He stated: "There's just no way airlines can absorb the additional costs they're experiencing. There may be some instances where airlines will discount to stimulate some traffic flow… but over time it's inevitable that the high price of oil will be reflected in higher ticket prices."
Potential Summer Shortages
While Walsh does not anticipate widespread cancellations, he expressed concern about potential shortages during the peak summer period if alternative fuel supplies are not secured. This comes after British Airways' parent company IAG warned that its profits would be hit, expecting to spend approximately two billion euros (£1.72 billion) more than planned on fuel this year. Chief executive Luis Gallego stated that IAG does not foresee any interruption for the summer in terms of jet fuel supplies.
Government Measures and Flight Cancellations
Transport Secretary Heidi Alexander assured the public that summer holiday plans would not face major disruption due to shortages. She revealed that additional fuel has been imported from America, and UK refineries have increased production. The government has also introduced a temporary rule change allowing airlines to group passengers from different flights onto fewer planes to conserve fuel.
Data from aviation analytics company Cirium shows that as of Tuesday, airlines have cancelled 296 departures from UK airports this month, representing 0.75% of the total. This is an increase from 120 cancellations six days ago. For the peak summer months, week-on-week schedule reductions are currently limited: June has 48 fewer outbound flights than a week ago (0.2% cancelled), July has 31 fewer, and August just four. Airlines can avoid compensation if they cancel flights with at least two weeks' notice, allowing them to delay decisions on summer cancellations.
Fuel Price Surge
The price of jet fuel has more than doubled since the start of the Middle East conflict, as Iran continues to restrict tanker passage through the Strait of Hormuz. A government spokesperson commented: "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."
