Airports could face a jet fuel crunch within 3 weeks, industry warns
A Lufthansa Airbus A340 passenger plane is seen landing at Eindhoven Airport during a rare charter flight from Athens, Greece.
Nicholas Economics | Nurfoto | Getty Images
Europe’s airport industry has warned that jet fuel shortages could begin within three weeks, disrupting summer travel and causing “significant” damage to the European economy.
ACI Europe, which represents airports across the European Union, said on Thursday that supply shortages would derail airport operations and air connectivity.
In a letter to EU Commissioner for Sustainable Transport and Tourism Apostolos Tzitzikostas and shared with CNBC, the industry body warned of the “drastic economic impacts” fuel shortages would have on the European economy.
“At this stage, we understand that if transit through the Strait of Hormuz does not resume significantly and steadily within the next three weeks, systemic jet fuel shortages will become a reality for the EU,” the letter said. It was said.
ACI Europe said potential shortages were particularly worrying ahead of the “summer season”, when many EU member states are counting on economic support from increased air travel. According to the group, air connectivity generates 851 billion euros (about $1 trillion) in GDP for European economies and supports 14 million jobs.
“Consequently, it is important that the EU prioritizes the availability and stable supply of jet fuel as part of its response to the oil and energy crisis triggered by the conflict in the Middle East.” he added.
The US and Israel’s war with Iran, which started on February 28, brought traffic in the Strait of Hormuz to a virtual halt, causing oil prices to rise above $100 per barrel and energy costs to rise.
Airlines were immediately hit by jet fuel prices, which rose 103% month-over-month as of March, according to the International Air Transport Association.
The price of jet fuel in the United States roughly doubled, rising from $2.50 per gallon on February 27 to $4.88 per gallon on April 2.
The United States reached a two-week ceasefire with Iran on Tuesday in exchange for Tehran allowing ships to pass through the Strait of Hormuz, but the vital passageway remains effectively closed. Before the war started, approximately 20% of the world’s oil passed through the Bosphorus.
US West Texas Intermediate crude oil last increased by 0.4% to $98.27 per barrel after exceeding $100 at the beginning of the session, while Brent crude oil remained almost stable at $96.02 per barrel.
Airlines are implementing various measures to offset rising jet fuel costs. Lufthansa’s CEO Carsten Spohr told employees last week that the German carrier was creating teams to create contingency plans due to the Middle East war. This may include grounding some aircraft.
Scandinavian airline SAS 1000 flights canceled In April, Ryanair CEO Michael O’Leary said the Irish carrier should look at: cancellation of some flights and reduction of capacity If fuel shortage continues in the summer months.
