By ITV News Producer Hannah Ward-Glenton
The impacts of the war in Iran are wide-ranging, and the latest industry to really feel its effects is aviation.
Iran has used its control over part of the Strait of Hormuz to prevent vessels from travelling through the passage, creating a chokepoint for huge quantities of oil and gas supplies. Oil and gas markets have subsequently been sent into turmoil.
Fuel is an airline’s highest operating cost, so as oil prices surge and the possibility of shortages looms, companies have to work out how to weather the storm, without knowing how long it could last.
As oil prices continue to rise, ITV News explains what the aviation sector does now.
Will flights be cancelled?
While some airlines have already cancelled flights to specific destinations, such as Tel Aviv, due to their geographical proximity to the Iran conflict, others have started cancelling flights because of fuel issues.
The chief executive of Ryanair, for example, has said the airline will not be able to run its full summer schedule because of jet fuel shortages if the Strait of Hormuz continues to remain closed.
“The Strait of Hormuz has been closed for 30 days. If it remains closed for 60 or 90 days, then we’re all facing an unknown scenario, and we are certainly looking at maybe having to cancel 5%–10% of flights through May, June and July,” Michael O’Leary told ITV News on Thursday.
But he did insist that most flights will operate and warned that delaying booking is more likely to result in paying higher prices as airfares rise.
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Further cancellations across the sector could come, according to James Kelly, Head of Aviation Finance at KPMG Ireland, who said: “Airlines might seek to trim unprofitable routes from their network.”
Which flights could be cancelled?
Mr O’Leary said that airlines won’t be able to choose which routes to cancel – cuts will depend on which airports suffer fuel shortages.
He said he expects to have only a few days’ notice from jet fuel suppliers if there are issues, making disruption hard to manage. That could then have a knock-on effect for passengers.
A number of airports in Italy – Bologna, Milan Linate, Treviso and Venice – have already been hit by restrictions on aviation fuel, according to local media.
Ryanair boss Michael O’Leary speaking to ITV News Economics Editor Joel Hills Credit: ITV News
The Italian branch of Air BP, one of the world’s leading suppliers of aviation fuel, issued a notice to airlines (NOTAM) informing them that fuel distribution will be rationed until April 9, the reports said, with priority being given to air ambulance flights, state flights and flights lasting more than three hours.
If they do have the choice, airlines tend to prioritise protecting long-haul flights and routes that are in high demand, so it could be shorter flights that aren’t as popular that could be first to be cancelled.
If you have booked flights, it is always advisable to check with your specific airline before travelling.
What have different airlines said?
Ryanair
Mr O’Leary said the airline will not be able to run its full summer schedule because of jet fuel shortages if the Strait of Hormuz remains closed.
The chief executive said that if the war in Iran doesn’t end “by the end of April”, he expects European airlines to start cutting scheduled flights.
Aurigny
Aurigny, which flies from Guernsey to Birmingham, Bristol, Dublin, Edinburgh, Exeter, Jersey, Leeds, London, Manchester, Paris and Southampton, has said “difficult decisions have had to be made” in response to the rising fuel prices.
“This includes cancelling certain flights between mid-April and June, combining services from nearby UK airports to reduce the number of empty seats, and the introduction of a temporary fuel surcharge of £2 on all bookings made from March 20.”
More than 200 people turned up at Alderney Airport on March 22 to protest Aurigny’s air services to and from the island. Credit: ITV Channel
Skybus
All Skybus flights between Cornwall and London have been cancelled from Friday, April 3, because of rising fuel costs and a drop in passenger numbers.
The route from Newquay Airport to London Gatwick was a public service obligation funded by Cornwall Council and the Department for Transport, but it is being pulled two months earlier than expected.
The service has been operated by Cornwall’s Skybus since the previous operator, Eastern Airways, went bust last November. An agreement with Skybus was due to end on May 31, but “economic uncertainty” has halted things earlier than expected.
Scandinavian Airlines
Scandinavian airline SAS announced in March it would be cancelling around 1,000 flights in March and April as a result of the surge in jet fuel prices.
“The sharp increase in fuel costs is affecting the entire European aviation system,” a spokesperson told The Wall Street Journal in March.
Where do airlines get their jet fuel?
According to data analytics firm Kpler, 18.8 million tonnes of jet fuel were shipped out of the Strait of Hormuz last year – a little over a fifth of total global seaborne exports.
China – the world’s second-largest jet fuel producer – is restricting exports. South Korea, another key producer, has cut output as it struggles to source crude oil to refine.
More tankers are now bringing jet fuel from the US to Europe, but the quantity does not match the amount lost.
“Even if the war ends immediately, there’s a crunch looming,” Michelle Bockmann, a maritime analyst with Windward, told ITV News.
Fire and smoke is seen after a drone struck a fuel tank forcing the temporary suspension of flights near Dubai International Airport. Credit: AP
Will flights become more expensive?
A likely knock-on effect of the increase in oil prices is an increase in customer costs.
“Airlines cannot afford to bear these higher fuel prices – it is likely that there will be increases in air fares in the coming months as airlines pass on the higher cost of fuel to their customers,” Mr Kelly said.
Could airlines use less jet fuel?
If the current issues around fuel become longer term, airlines are likely to refocus on modernising their aircraft fleets, as new technology aircraft and engines can be 15-20% more fuel efficient than older craft, Mr Kelly says.
But it’s no quick fix.
“Fleet modernisation takes years and requires a lot of capital. If you ordered a new aircraft from Boeing and Airbus now, it would likely only deliver after 2030!”
The availability of new aircraft had already been impacted by post-Covid supply chain issues, the impacts of global tariffs and quality concerns.
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