European Airlines Cut Thousands of Flights as Jet Fuel Prices Double

The soaring cost of jet fuel is forcing European airlines to cut thousands of flights through the peak summer travel season as the ongoing impact of the war in Iran ripples across the aviation industry. Jet fuel prices have roughly doubled since the start of the U.S. and Israeli-led war, and airlines in Europe — which imports about a third of its jet fuel, largely from the Middle East — have been hit particularly hard. German airline Lufthansa said this week it would cut 20,000 flights from its schedule through the fall to save on jet fuel. "That's massive," said Rico Luman, a senior economist for ING Research based in Amsterdam. European airlines might be preparing to make deeper cuts to their schedules as well, he said. "This could be the start of more announcements," Luman said in an interview. "When we remain stuck in this conflict and face high fuel prices like this, we will see more coming out of other airlines." Other European carriers, including KLM and Scandinavian Airlines, have announced cuts to their schedules in response to rising fuel prices — though so far, nothing on the scale of the reductions at Lufthansa. Energy experts have warned that a prolonged closure of the Strait of Hormuz, the narrow waterway off Iran's coast, would lead to higher jet fuel prices and possible shortages in Europe. "We are facing the biggest energy security threat in history," said Fatih Birol, the head of the International Energy Agency, in an interview with CNBC on Thursday. Europe normally gets a large percentage of its jet fuel imports from refineries in the Middle East, Birol said, "and this is basically now almost zero." Birol had warned last week that Europe had "maybe six weeks or so" of remaining jet fuel supplies, though he said Thursday that the continent is trying to replenish those supplies with imports from the U.S. and Nigeria. "I really hope that, first of all, the strait is opened," Birol said on Thursday. "But we may well need to take some measures in Europe to reduce travel as well." The International Air Transport Association, which represents 360 airlines worldwide, also warned of possible fuel shortages in Europe. "Along with doing everything possible to secure alternative supply lines, it's important that authorities have well-communicated and well-coordinated plans in place in case rationing becomes necessary," said Willie Walsh, the IATA's Director General, in a statement last week. In the U.S., major airlines have said they'll pass some of their soaring fuel costs on to customers through higher fares and baggage fees. Some have also said they would reduce capacity this year. But so far, U.S. carriers have not announced major flight cuts on the scale of airlines in Europe or Asia. Lufthansa said it would cancel short-haul flights, including unprofitable routes within Europe. "They're canceling flights on high-frequency routes, so travelers could just find an alternative for the canceled flight," said Luman, the ING Research economist. But he warned that European travelers should expect to have fewer options during the peak of the summer vacation season in July and August. "I'm afraid there's no quick fix for this, because we've seen the damage [to] the infrastructure in the energy sector in the Middle East," he said. "So we expect oil prices to remain high for longer, at least until the end of this year."