Airlines Cut Thousands of Flights as Jet Fuel Prices Double

The Iran war has triggered a global aviation crisis, with major airlines cutting thousands of flights and considering steep fare increases as jet fuel prices have more than doubled since late February, when the conflict began with U.S. and Israeli strikes on Iran. The Lufthansa Group announced Tuesday it would cut 20,000 short-haul flights through October, primarily through its Frankfurt and Munich hubs, saving approximately 40,000 tonnes of jet fuel. United Airlines CEO Scott Kirby warned the airline may need to raise fares by as much as 20 percent to offset costs, noting the company is currently passing only about half of the increased fuel expenses to customers. The disruption stems largely from fighting around the Strait of Hormuz, a waterway off Iran's coast that carries roughly a fifth of the world's oil. Jet fuel prices have surged from about $99 per barrel at the end of February to as high as $209 per barrel in early April. The European Union's energy commissioner said the conflict is costing Europe around 500 million euros daily, with the International Energy Agency estimating Europe has only about six weeks of jet fuel reserves remaining. According to aviation analytics firm Cirium, all but one of the world's 20 largest airlines have already cancelled scheduled May flights. Beyond aviation, the conflict is rippling through global supply chains and corporate earnings. The Reuters review found that 21 companies have withdrawn or cut financial guidance since the conflict began, 32 have signaled price hikes, and 31 have warned of financial impacts. Paint maker AkzoNobel said its raw material costs could rise by the high teens in percentage terms due to Strait of Hormuz disruption. German tourism group TUI cut its full-year profit forecast, while mining company South32 is monitoring diesel fuel supplies closely. The Pentagon has reportedly told U.S. lawmakers it could take up to six months to clear the strait of Iranian mines, suggesting the energy crisis could persist well into the future.