Chevron warns jet-fuel crunch could worsen

Chevron chief executive Mike Wirth said air travel is likely to “get worse” over the next few weeks as jet fuel supplies tighten and airlines trim schedules. (cbsnews.com) Wirth told CBS News on April 23 that jet fuel is tightening “very quickly” in Europe and Asia, and that airlines are already passing higher costs into fares. He said travelers should expect fewer available flights and fuller planes. (cbsnews.com) He tied the squeeze to the Strait of Hormuz standoff and said some regions were already short of jet fuel before the war with Iran began on February 28. North American jet fuel prices have surged more than 80% from a year earlier, according to the International Air Transport Association data cited by CBS. (cbsnews.com) Jet fuel is the refined fuel airlines burn, and carriers cannot easily swap it out or store huge extra volumes at airports. When tanker flows slow, airlines first pay more for fuel, then cut marginal routes and raise fares to protect cash. (cnbc.com) Europe’s airport industry has been warning that the supply problem could move from expensive to disruptive. ACI Europe said on April 10 that a systemic jet fuel shortage could become reality in the European Union within three weeks if passage through Hormuz does not resume in a significant and stable way. (cnbc.com) ACI Europe said air connectivity supports 851 billion euros in gross domestic product and 14 million jobs across European economies. The group said the risk is especially acute heading into the peak summer season, when airports and tourism-dependent countries rely on heavy passenger traffic. (cnbc.com) Airlines have already started cutting. Lufthansa Group said on April 22 that it would remove 20,000 short-haul flights through October, and the company said the cuts target unprofitable routes and would save more than 40,000 metric tonnes of jet fuel. (euronews.com) (usnews.com) Low-cost carriers are feeling the pressure first because cheaper tickets leave less room to absorb fuel spikes. Ryanair, Transavia, Volotea and AirAsia X have all cut flights, and analyst Dudley Shanley of Goodbody said more trimming is likely if fuel stays at current levels. (turkiyetoday.com) European Union energy commissioner Dan Jorgensen told Sky News last week that many holidays are “very likely” to be affected by cancellations or much more expensive tickets. That is the same warning Wirth delivered from the oil market: higher fuel costs are moving into airline schedules and passenger prices. (news.sky.com) (cbsnews.com)