EasyJet's share price rose only 10% on a takeover approach from US fund Castlelake, prompting skepticism. Key factors for a potential deal include valuation, European ownership rules, and the stance of founder Sir Stelios Haji-Ioannou.
The price of jet fuel most European airlines currently use has jumped by half since the start of the war.
Jet fuel prices in Europe have more than doubled since the closure of the Strait of Hormuz, squeezing carriers ahead of peak summer travel.
Ryanair CEO Michael O'Leary warned that European airlines will fail if jet fuel prices remain elevated over summer. Speaking at a conference in Oslo, he said fuel has surged from $80 to $150 per barrel since the Strait of Hormuz was blockaded following the Middle East war that began Feb. 28. While Ryanair has hedged 80% of its fuel, O'Leary predicted competitors will face financial difficulties and potential bankruptcies if prices stay at $150 into July-September.
European flight prices are falling as airlines offer discounts to overcome customer hesitancy over economic concerns from the US-Israel war with Iran, Wizz Air CEO József Váradi said. Jet fuel costs have surged from $831 to around $1,500 per metric tonne since late February, with Europe heavily dependent on Gulf imports now blocked by the Strait of Hormuz closure. While many airlines are raising prices, European carriers can cut fares short-term because they hedged fuel purchases before the conflict began.
The outspoken CEO of Europe’s biggest airline named Wizz Air and airBaltic as among those at risk.
European airlines are cutting thousands of flights this summer as jet fuel prices have roughly doubled since the U.S. and Israeli-led war began, with Europe importing about a third of its jet fuel from the Middle East. Lufthansa announced 20,000 flight cuts through the fall, while KLM and Scandinavian Airlines also announced schedule reductions. The International Energy Agency warns Europe faces its biggest energy security threat with jet fuel imports from the Middle East now nearly zero.
The increased use of the pipeline comes at a time when European airlines and airports are already facing serious fuel supply challenges due to the conflict with Iran
