European airlines are facing their biggest challenge since the COVID-19 pandemic as the Iran war pushes up jet fuel prices and buffets travel through the Middle East, casting a shadow over the summer holiday season.
Carriers have been largely riding out the crisis with hedges that have tamed costs even as the price of jet fuel has risen nearly 84% since the start of the conflict on 28 February.
"There is a risk that we'll see rationing of fuel supply, particularly in Asia and Europe," Willie Walsh, head of the International Air Transport Association said.
Walsh said, however, that the situation was not yet as bad as the disruption caused by the COVID-19 pandemic in 2020, which led to travel demand plummeting and hundreds of billions of dollars in losses for the aviation sector.
"I think COVID was on a completely different scale," Walsh added.
Jet fuel price hedges start to run out
The war has hit airline shares, with on-again-off-again peace talks to end the conflict and re-open the critical Strait of Hormuz to normalise global oil and gas flows in what is the worst energy crisis in decades.
Airlines are now warning about their hedges, which help lock in set prices - running out, with outlooks increasingly murky as people delay booking travel or make plans closer to home to avoid potential disruption and higher fares.
Sweden's Energy Minister Ebba Busch on Tuesday fired an "early warning" about potential jet fuel shortages despite good current supply, cautioning Swedes to think through travel plans.
European budget airline Wizz Air CEO József Váradi said on Monday that summer bookings were strong. However, easyJet and tour operator TUI announced declines in forward bookings and issued profit warnings in recent weeks.
Váradi, meanwhile, cautioned that even an end to the conflict would not quickly resolve high fuel prices.
"Even if the war is stopped in Iran, I don't think this is going to put the fuel price back to what it used to be two months ago," he told reporters in London.
Winners and losers
Gulf airlines have been the hardest hit, with data from Cirium Ascend showing that flights operated by Middle Eastern operators dropped 50% year-on-year in March, while bookings for Q2 and Q3 connecting via the main Gulf hubs are down 42.5%.
Global passenger capacity, however, remains up near 2% so far in 2026 versus 2025, it said, underscoring wider resilience.
The crisis has though dampened margins and sharpened the gap between weaker and stronger players.
Some have dodged the impact. Finland's flag carrier Finnair said the crisis had so far had a net positive impact with more demand for its Asian flights. Budget airline Norwegian on Tuesday brushed off jet fuel supply risks.
Armenian Prime Minister Nikol Pashinyan's Civil Contract party has won the Armenian elections, picking up nearly half the vote. With a majority in p...
Uzbekistan and Russia have agreed to deepen cooperation in agriculture, energy and food security following high-level meetings held during the St Pete...
Iran’s Foreign Ministry spokesperson Esmaeil Baghaei said on Monday that the U.S. would bear direct responsibility for any escalation in West Asia a...
UK Prime Minister Sir Keir Starmer has hosted Ukrainian President Volodymyr Zelenskyy, French President Emmanuel Macron and German Chancellor Friedric...
Four Palestinians, including an eight-year-old boy, were killed in Israeli strikes across Gaza on Monday (8 June), according to local health officials...
Demand for electric vehicles has surged across Europe as elevated fuel prices linked to the Iran conflict push consumers toward new and second-hand EVs, according to data shared with Reuters. It is providing a boost to an auto industry that has struggled with slower-than-expected adoption.
The U.S.-Israeli war with Iran and the closure of the Strait of Hormuz have triggered the largest oil supply disruption ever recorded in terms of daily output losses. However, Reuters calculations show that at least one past crisis had a greater cumulative impact over time.
The U.S. Navy has forcibly intercepted and boarded the Iranian cargo ship TOUSKA in the Gulf of Oman after it attempted to breach the ongoing naval blockade. President Trump confirmed that the vessel was neutralised and seized by Marines following a direct strike on its engine room.
Some 20,000 seafarers remain stranded on around 2,000 ships in the Strait of Hormuz amid the ongoing Middle East conflict, in what has been described as an unprecedented situation in the post-Second World War era. The vessels include oil and gas tankers, cargo ships and six cruise liners.
Counting is underway in Armenia's elections. The results of the vote are set to determine the political direction of the country of three million people for the next few years. Prime Minister Nikol Pashinyan is hoping to fend off challenges from several pro-Russia candidates to secure a third term.
Armenian Prime Minister Nikol Pashinyan's Civil Contract party has won the Armenian elections, picking up nearly half the vote. With a majority in parliament, Pashinyan is set for a third term as Prime Minister. But an opposition politican has said he will challenge the election results.
Azerbaijan's Foreign Ministry has confirmed the number of casualties its citizens suffered as a result of the 5 June drone attacks on the cargo ships Natra and Zircon in the Sea of Azov. In a statement, it said four Azerbaijani citizens were killed and four others were injured.
The results of Armenia’s parliamentary elections will determine the makeup of the National Assembly and shape the country's political direction for the foreseeable future. But in Armenia, the final result is not decided by vote percentages alone. Here's how it works.
Barcelona is preparing to mark a historic milestone in the legacy of architect Antoni Gaudí as Pope Leo XIV visits the city this week to inaugurate the Tower of Jesus Christ at the Sagrada Família basilica, almost exactly 100 years after the visionary architect’s death.
Iran and Israel have halted strikes on each other, but Tehran has warned it will recommence attacks if Israel continues military action in Lebanon. U.S. President Donald Trump and Lebanese President Joseph Aoun have meanwhile made pleas for peace.
Sirens rang out across multiple areas of Israel on Sunday night after missiles were launched from Iran towards the country, the Israeli military said. Earlier, Tehran's top negotiator in talks with the U.S. threatened to target Israeli and American assets in the region, after Israel struck Beirut.
U.S. President Donald Trump acknowledged calling Israeli Prime Minister Benjamin Netanyahu “crazy” during a phone exchange over fighting in Lebanon. The call came as the U.S. was attempting to broker an end to hostilities involving Iran.
Iran’s Revolutionary Guards (IRGC) said on Monday they targeted the source of an attack on a telecom facility on Sirik Island near the strategic Strait of Hormuz, Tasnim News Agency reported.
Iran really wanted to make a deal with the U.S. and that it would be a good one for Washington and its allies, President Donald Trump said on Monday.
You can download the AnewZ application from Play Store and the App Store.
What is your opinion on this topic?
Leave the first comment