What is this I hear about Europe running out of jet fuel?
There are certainly supply issues but there is no need to panic just yet.
Ryanair has said in a new statement that its suppliers could guarantee it enough jet fuel until sometime next month, adding that fuel could be in short supply after that if ships carrying fuel do not start coming into Europe from the Strait of Hormuz soon.
“If the Iran war finishes soon, then supply will not be disrupted,” the airline said.
“If the closure of the Hormuz Straits continues into May or June, then we cannot rule out risks to fuel supplies at some airports in Europe.”
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Well that doesn’t sound great, does it?
No. But it is worth pointing out that the airline is by no means suggesting there will be no jet fuel, just that supplies might become an issue.
And is it just a Ryanair thing?
Not at all. The Airports Council International Europe said last week that a “systemic jet fuel shortage” is set to become a reality. And Fatih Birol, the head of the International Energy Agency, has said Europe has “maybe six weeks or so” of jet fuel supplies on hand. He also warned that even if the conflict comes to an end it could take “up to two years to come back where we were before the war”.
Is there any good news?
Well easyJet, which is the second-largest carrier in Europe, said in a statement that it had locked in about 70 per cent of its fuel through the summer, but that prices were “volatile” for the remaining portion. “In line with the wider industry, we remain in close contact with our fuel suppliers and airports around fuel supply,” it said.
So do I need to panic about my summer holiday plans?
Not according to Eoghan Corry, travel writer and owner of the TravelExtra trade magazine. “We shouldn’t be worried at all,” he said.
“Not only have the two main airlines in Ireland locked in good prices when it comes to jet fuel, they are also big buyers and will probably be able to pull rank a little bit when it comes to queuing at the pumps.”
But some flights will be cancelled, won’t they?
That is certainly a possibility. What happens in situations like this is airlines suffering supply issues will first start consolidating flights on busy routes. That means instead of 10 flights a day from Dublin to London, for example, an airline might trim it back to seven.
And why do they do that?
They do that because they can accommodate those who have already made bookings and won’t have to issue refunds or compensation.
Corry says that “when airlines cancel flights due to strikes the next thing they will look at is the marginal and not very profitable routes and they could be cancelled”.
And what rights do I have if my flight is cancelled?
Airlines can cancel flights without having to pay compensation if they give two weeks’ notice to consumers. Up to that point they have considerable leeway.
Could Irish airlines hit customers with surcharges to recoup their losses?
That could happen but we are by no means there yet. When there have been fuel price spikes in the past we have seen fuel surcharges added, even after bookings were made, and Corry said we might see that happening this time too.
“We have never seen Ryanair do that but it happened with tour operators and some legacy carriers, with €20 per person or thereabouts added to the price of holidays and flights already booked,” he said.
“That might be a worst-case scenario.”
So, should I book my flights for the summer now?
That might be a good idea. Since the pandemic the booking pattern for flights has become much later than it used to be.
That means if airlines start cutting flights from certain routes, like Dublin to Malaga for example, they will just stop taking bookings once five flights are full, whereas in the past they might have had eight flights a day.
Those that have their bookings already secure will be the ones looked after in the first instance. But seats will become scarce for those yet to book and prices will climb.
Have prices started climbing already?
In some places they have. Hong Kong’s Cathay Pacific, Australia’s Qantas, Malaysia’s AirAsia, Scandinavian airline SAS, and Air New Zealand have all implemented temporary or permanent surcharges based on air fuel price increases.
And what about the longer term?
Fuel accounts for 26 to 27 per cent of airlines’ costs, and, if prices stay elevated in the months ahead the cost of airfares everywhere will climb and we could be about to leave the era of cheap air travel. Although it is too soon to say with any security if that will happen, as there is too much volatility in the world.
