The unmistakable smell of jet fuel at airports has become a costly reminder of the turmoil gripping global aviation. Since the eruption of conflict in the Middle East, jet fuel prices have skyrocketed by over 120%, with a tonne now costing more than $1,500. The blockade of the Strait of Hormuz has choked off 20% of globally traded jet fuel, hitting Europe—and the UK in particular—hard. Britain, which imports 65% of its jet fuel, faces potential shortages this summer as refineries continue to close.
Airlines are scrambling to cope. Many have hedged fuel costs, but not enough. EasyJet spent £25 million in March alone on unhedged fuel. Carriers like Air France KLM, Lufthansa, and SAS have slashed summer schedules. Lufthansa is cutting 20,000 flights through October. Long-haul routes have seen the steepest fare hikes: a London-to-Melbourne ticket in June is up 76% from last year, according to Teneo. Virgin Atlantic has slapped surcharges of up to £360 on business class fares.
Yet short-haul European flights are bucking the trend, with some prices actually dropping as airlines like Wizz Air use low fares to lure hesitant travelers. "People don't know what's coming," admits Wizz Air's CEO József Váradi, "so there's hesitancy. But price stimulation can overcome that."
Industry experts warn that the crisis exposes fragile refining capacity and could lead to further cancellations if the Strait of Hormuz remains blocked. "If a route was marginally profitable before, it's now underwater," notes Jonathan Hinkles, former CEO of Loganair. The peril to summer holidays is real, and passengers may end up footing the bill—or missing their flights altogether.