Airlines Cut Routes as Fuel Costs Rise

The European Union is not facing a shortage of aviation fuel despite ongoing disruptions to global energy supplies caused by the conflict with Iran and restrictions on traffic through the Strait of Hormuz, according to EU Transport Commissioner Apostolos Tzitzikostas.

The strait has remained heavily restricted for several months, reducing global oil supplies by an estimated 14 million barrels per day – roughly 14% of world demand.

For now, Europe has managed to offset the shortfall through alternative imports, primarily from the United States and Nigeria. The Middle East normally accounts for about one-fifth of the EU’s aviation fuel imports.

According to Tzitzikostas, the main challenge is not fuel availability but rising costs. Aviation fuel typically represents between a quarter and a third of airlines’ operating expenses, prompting some carriers to cut less profitable routes.

Higher fuel costs could eventually push up ticket prices, although many airlines have so far been shielded by existing fuel-hedging arrangements. Analysts estimate that oil will average around $90 per barrel this year.

Tzitzikostas warned that a prolonged disruption in the region could worsen the situation. However, EU member states maintain emergency reserves, and Brussels is prepared to coordinate their use if necessary.

“It's not only an issue of jet fuel or fuels”, he said. “We will have even possibly a global recession.”

(reuters, max)