A sharp escalation in fuel costs linked to the conflict in Iran is forcing airlines into widespread schedule cuts, with the knock-on effects now visible across global networks.
Fresh figures from Cirium indicate that nearly 7 percent of all flights planned worldwide for Monday failed to operate — more than 7,000 cancellations out of just over 104,000 scheduled departures. That equates to more than one in 20 services. By comparison, the same day last year saw 4.7 percent of flights cancelled, or 4,797 out of 102,132.
At the core of the disruption is a dramatic shift in fuel economics. Jet fuel, which traded at US$742 per metric tonne a year ago, has surged past US$1,710. The spike follows tightening supply conditions triggered in part by the shutdown of the Strait of Hormuz, a vital corridor responsible for transporting roughly 20pc of the world’s oil.
Crude markets have followed suit. Brent crude touched $116 a barrel in early Monday trading, reinforcing upward pressure across refined products.
The issue is not confined to price alone. Aviation fuel is more resource-intensive to produce than petrol or diesel, meaning refiners require greater volumes of crude per litre. As supply tightens, jet fuel availability is being hit disproportionately, raising the risk of outright shortages.
The UK is due to receive what is understood to be its final jet fuel cargo from the Middle East in the coming days — a signal of how quickly supply chains are tightening.
Airlines have begun adjusting capacity in response.
In the US market, United Airlines has already acted, trimming roughly 5 percent of capacity on routes with weaker margins — making it the first major American carrier to respond directly to fuel costs.
Its chief executive, Scott Kirby, warned that sustained fuel prices at current levels would have a material impact on fares: “If oil prices stayed where they are today, that’s US$11 billion of expense for us, and that would require prices to be up 20 percent to break even, to cover that cost.
Air New Zealand has removed 1,100 flights from its schedule through to early May, while SAS is preparing to cancel 1,000 services next month, largely on domestic sectors. Vietnam Airlines has signalled that if jet fuel prices rise to between US$160 and US$200 a barrel, it may need to cut flights by 10 to 20 percent per month over the next quarter. That scenario would affect up to 18 percent of its international operations and more than a quarter of its domestic network.
Alongside cost pressures, operational disruption tied directly to the conflict is compounding the situation. Airlines including British Airways, Air France-KLM and Lufthansa have suspended or cancelled services to and from parts of the Middle East.
Regionally, the sharpest deterioration is being seen in North America, where 14.6 percent of departing flights were cancelled on Monday — more than triple the 4.4 percent recorded a year earlier.
Taken together, the figures point to a sector grappling with both immediate supply constraints and the prospect of sustained cost inflation, with airlines increasingly forced into reactive network management as conditions continue to evolve.
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Author: Edward Hardy
