Airlines cancelling flights as jet fuel crisis worsens amid Middle East tensions

The global aviation industry is in turmoil driven by the months-long US-Iran conflict.

The significant turbulence is marked by dramatic surge in jet fuel prices, indefinite delays in flights, cancellations and increased fares.

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This geopolitical tension has caused jet fuel prices to nearly double, jumping from $85-$90 to $150–$200 per barrel, forcing airlines worldwide into emergency survival modes.

At the core of this issue lies supply chain’s breakdown as 75 percent of Europe’s jet fuel comes from the Middle East. The persistent blockade of the Strait of Hormuz has created an acute shortage. Now the warnings have been circulating that within the weeks the supplies could run out.

To address the growing crisis, the EU commission has stepped up its efforts by launching the “AccelerateEU” package designed to optimize the fuel distribution between states to avoid total collapse of energy markets.

Aviation industry responses

Instead of airlines cancelling the flights, they are utilizing four main levers to combat the rising costs.

Mass flight cancellations

In recent development, Lufthansa is cutting 20,000 flights over six months and grounding its CityLine subsidiary’s 27 aircrafts.

SAS (Scandinavian airline), Asiana, and KLM airlines have announced significant cancellations, ranging from hundreds to thousands of lights to save fuel.

Increased fees and surcharges

Major US airlines are dealing with the jet fuel crisis by raising fees and surcharges. US airlines, including American, Delta, Alaska, United, and Southwest airlines have increased checked bag fees, in some cases as much as $150 for a third bag.

Most international carriers, like Air India, Cathay Pacific, Emirates, have implemented distance-based or flat-rate fuel surcharges to pass costs to consumers.

Financial restructuring

Some airlines have carried out financial restructuring. Airlines including Alaska, Air New Zealand, TUI have withdrawn profit forecasts.

Spirit Airlines has requested emergency government funding to avoid liquidation, on the other hand JetBlue secured $500 million in debt financing to stay afloat.

Route trimming

To tackle the jet fuel crisis, airlines are also cutting unprofitable routes and minimizing seat capacity to ensure remaining flights can operate at maximum efficiency.