Due to the unexpected and sudden closure of the Strait of Hormuz, following attacks on Iran by Israel and Donald Trump's USA, a significant amount of aviation fuel is no longer reaching Europe. Airlines are worried. Not only is air fuel kerosene becoming more expensive, but in various countries there is also the threat of shortages. Luckily Belgium is better prepared than most. Nevertheless, tickets for flights for this summer are set to become up to 9 per cent more expensive if the situation persists.
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Closed Hormuz Strait cuts off air fuel supplies: what does that mean for your well-deserved holiday?
Colin Clapson
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Airlines Lufthansa of Germany and Ryanair of Ireland were the first to sound the alarm last week. If the Strait of Hormuz remains closed, Brussels Airlines-parent Lufthansa will have to ground up to 40 aircraft this summer, right in the middle of the holiday season. Ryanair boss Michael O’Leary, meanwhile, estimates that “5 to 10 per cent of flights in May, June and July” will have to be cancelled.
The European aviation industry therefore faces a two-fold problem. According to the International Air Transport Association IATA 30 per cent of all European aviation fuel, which mainly comes from Kuwait, passes through the closed Strait of Hormuz. According to market analysts at Argus, as much as half is at risk.
In the short term, this is pushing kerosene prices to record highs. European airlines have to compete with their Asian rivals that are also keen to secure their supplies. On Thursday, a tonne of aviation fuel in north-west Europe cost $1,900, a jump of no less than $300 in a single day.
In the longer term, airlines could even completely run out of kerosene on some routes.
In Europe, shortages are looming from May and June onwards, says Britta Baeke, editor-in-chief of Travel Express Benelux. “There is certainly a slight sense of panic. If no more supplies come through, flights will have to be cancelled, starting with the least profitable ones.”
In the UK flights have already been cancelled between London, England, and Cornwall.
Fewer problems in Belgium
Belgium, on the other hand, is in a remarkably good position. According to market analysts Argus, Belgium had enough fuel in stock at the end of last year to last for three months. Of all the countries analysed, only Ireland is in an even better position. Analyst George Shaw even calls Belgium “the oil hub of Europe”, alongside the Netherlands.
“At the moment, we’re not seeing any problems with availability anywhere,” says Nico Cardone, spokesperson for Belgian flag carrier Brussels Airlines. “But of course, we don’t have a crystal ball.”
According to Cardone, shortages are initially likely to occur mainly in Asia, “but possibly in Europe as well. With the emphasis on ‘possibly’. We are working on scenarios to deal with this.”
"For example, we can carry more fuel on our aircraft for European destinations, ensuring we have enough for the return journey. On longer flights, to the US or Africa, we can make a technical stop en route to refuel if there isn’t enough fuel available at the destination."
Tickets up to 9 per cent more expensive!
For the time being, the chance of your Easter holiday flight being cancelled is very small. But what do these higher fuel costs and potential shortages mean for your summer trip?
Brussels Airlines will not be charging any extra surcharge on tickets that have already been booked, Cardone emphasises. "But if the situation remains the same for a long time and fuel prices continue to rise, it goes without saying that this will also have an impact on ticket prices." It could therefore become more expensive to book a new ticket.
Don't put it off!
Travel expert Britta Baeke estimates that flight tickets could become up to 9 per cent more expensive this summer. "Prices aren’t going to skyrocket, though."
Baeke does not believe that additional fuel surcharges will be applied to flight tickets you book yourself, but they may well be charged on package holidays. "However, there are operators like Corendon (which offers holidays to destinations including Turkey and Morocco, ed.) who have already stated that they will not pass on these extra costs to the customer."
And what if you’re planning to fly this summer but haven’t booked a ticket yet? “Generally speaking, ticket prices don’t fall as the flight date approaches. Nor is it the case that kerosene prices will drop very quickly. So if you really want to go on holiday by plane, I wouldn’t wait too long to book.”