European airlines downplay jet‑fuel shortage

Reuters reported on May 14 that European airlines, airport operators and tour companies were presenting a calmer picture of summer fuel availability than traders and some policymakers had suggested. The immediate issue is not whether carriers can publish schedules — most still expect to fly them — but how much they must pay to keep tanks full. The pressure comes from the disruption of oil and fuel flows through the Strait of Hormuz, a route tied to roughly a fifth of global oil movements and about a quarter of Europe’s jet-fuel supply, according to Reuters and industry data. ### Why are airlines sounding calmer than the market? Sebastian Ebel, chief executive of TUI, said this week there was “absolutely no indication” that the company was running out of fuel. After presenting quarterly results on Wednesday, Ebel said the debate had become “a little bit artificial” because TUI saw no shortages in the coming weeks and no summer impact beyond prices. (zawya.com) Carsten Spohr, Lufthansa’s chief executive, struck a more qualified tone but still said the group’s supply chain was holding. Spohr said deliveries were sufficient through mid-July, though visibility beyond that point was less certain. Reuters reported that about a quarter of Lufthansa Group’s normal jet-fuel intake had come from the Gulf; Spohr said half of that volume had been replaced from other sources and the rest was being covered from reserves. (zawya.com) Michael O’Leary, Ryanair’s chief executive, told Reuters in late April that the risk of a supply disruption was receding. Jozsef Varadi, Wizz Air’s chief executive, said he did not think the industry would run out, arguing that high prices were giving suppliers an incentive to redirect fuel. (zawya.com) ### If supply is tight, where is the fuel coming from? Reuters reported that airlines have been able to secure jet fuel from suppliers in the United States and Nigeria by paying more. That does not remove the shortage risk in every location, but it shows that the market is still finding cargoes at a price. (zawya.com) Airport operators have also added buffers. Reuters, citing aviation fuel technology firm i6 Group, said European airport operators increased jet-fuel reserves by more than 60% in April. Gary McLean, managing director of Dublin Airport, told Reuters that in the short term he was not seeing any impact on supply. (zawya.com) ### So why are traders and officials still warning about shortages? The International Energy Agency said on Wednesday that global oil supply would not meet demand this year as the conflict hit Middle East production. That warning matters because Europe has lost access to part of a supply chain that normally feeds its aviation market during the busiest travel period of the year. (zawya.com) LSEG Workspace data, as cited by Reuters, showed jet-fuel stocks in the Amsterdam-Rotterdam-Antwerp region near record lows. That hub is one of Europe’s key trading and storage centers, so low inventories there are a sign that replacement barrels are arriving, but not in comfortable volumes. That last point is an inference based on the low-stock data and airlines’ comments about paying premiums for alternative supply. (zawya.com) ### How much have prices moved? Wizz Air’s Varadi told Reuters jet fuel was trading near $1,400 a metric ton, about double pre-war levels. IATA’s fuel monitor showed the global average jet-fuel price at $162.89 a barrel for the latest reported week, underscoring how elevated aviation fuel costs remain even after a week-to-week decline. (rte.ie) Fuel is one of the industry’s biggest operating costs, so a price shock can hit airlines even if physical shortages never force flight cuts. Reuters’ reporting suggests that, for now, carriers are choosing to absorb or manage that cost pressure rather than publicly trim summer schedules. (zawya.com) ### What backstop does Europe have if the squeeze worsens? The European Union’s oil-stocks regime requires member states to hold emergency stocks equal to at least 90 days of net imports or 61 days of consumption, whichever is higher. Those rules cover crude oil and petroleum products and give governments and the European Commission a formal framework for releases in a supply emergency. (zawya.com) Through the next several weeks, the clearest operational marker is Lufthansa’s mid-July supply horizon and whether airports keep rebuilding inventories after April’s 60% reserve increase reported by i6 Group. The next official stock data point under EU rules comes in monthly submissions from member states to the European Commission. (zawya.com) (energy.ec.europa.eu)