Airlines warn of jet fuel shortage, summer cuts

Ryanair CEO Michael O’Leary said on May 16 that travelers are likely to favor shorter trips to Portugal, Spain and Italy this summer as European airlines confront higher fuel costs and supply risks. CNBC reported the shift as carriers adjust schedules and passengers look for ways to avoid higher fares and possible disruption during the peak holiday season. Europe typically imports about 75% of its jet fuel from the Middle East, CNBC said, leaving airlines exposed while the Strait of Hormuz remains blocked. The International Air Transport Association said jet fuel prices were up 103% at the end of March from a month earlier, according to CNBC. ### Why are airlines warning about fuel now? The International Energy Agency’s Fatih Birol said on April 23 that Europe could struggle to meet summer jet fuel demand unless it secures more imports. Birol told CNBC that August demand is typically about 40% above March levels and said Europe would face difficulties if current supply conditions persist. CNBC reported on May 16 that European airlines have been under pressure since the U.S.-Iran war began, as they deal with both a shortage of jet fuel and sharply higher costs. The network said carriers have responded by increasing surcharges and cutting less profitable routes. ### What did Michael O’Leary say travelers are doing? Michael O’Leary told CNBC that summer demand appears to be shifting away from long-haul and Middle East trips and toward shorter-haul destinations in southern Europe. (cnbc.com) He said travelers would increasingly choose Portugal, Spain and Italy and avoid the Middle East or longer-haul routes. POLITICO reported on April 29 that O’Leary had also said Europe was unlikely to face shortages in May, but there was no “100 percent guarantee” against supply problems in June, July and August. (cnbc.com) He said Ryanair’s suppliers did not expect significant issues until early June, while warning that fuel affordability would depend on how long the war continued. ### Are travelers already changing bookings? (cnbc.com) TrainPal data cited by CNBC showed Eurostar tickets to France bought by U.K. residents rose 42% in April from the prior month and 25% from a year earlier. CNBC said British travelers were looking more closely at destinations such as France, Spain and Greece and were considering rail as an alternative. CNBC also reported that some travelers were choosing staycations or deciding not to travel at all because of economic uncertainty and the risk of disruption. (politico.eu) The network said holidaymakers were opting to stay closer to home to save money. ### Which airlines have already cut flights? CNBC said Lufthansa, SAS and Air France-KLM were among the European airline groups cutting flights as fuel shortages and higher prices weigh on schedules. (cnbc.com) Birol told CNBC in April that Lufthansa and SAS had already reduced flights as the industry prepared for stronger summer demand. Croatia Airlines said on May 16 it would cancel about 900 flights over the next quarter, according to Croatia Week. (cnbc.com) The report said the reductions amount to about 5% of the carrier’s planned 27,000 operations in that period and would mainly involve lower frequencies and schedule changes rather than full route suspensions. Croatian transport minister Oleg Butković described the measures as temporary operational rationalization, Croatia Week reported. ### What happens next for summer travel? June, July and August are the months O’Leary identified as still lacking full certainty on fuel supply, according to POLITICO. Birol told CNBC that August demand is materially higher than spring levels, making additional imports a key variable for the summer season. Croatia Airlines said its adjustments will run through the next quarter, while Ryanair and other European carriers continue to monitor fuel availability and pricing into early June and the peak summer schedule. (croatiaweek.com) Travelers booking southern Europe, rail alternatives and shorter-haul trips are likely to keep watching carrier updates over the coming weeks. (politico.eu)