The International Energy Agency warned on Thursday that European airlines could face a jet fuel shortage by June if the Strait of Hormuz remains blocked.STEFANO RELLANDINI/AFP/Getty Images
Canadians travelling to Europe and parts of Asia may face flight disruptions and cancellations within weeks as the conflict in the Middle East strains already dwindling global jet-fuel supply.
But travel and aviation experts warn against passengers cancelling flights prematurely, absolving carriers of their obligations to rebook or refund passengers, while advising those who haven’t yet booked to lock in prices with refundable tickets.
Germany’s Lufthansa airlines announced Thursday that it’s shutting down its CityLine subsidiary, grounding as many as 27 planes. Ryanair said earlier this week that the carrier can only guarantee its fuel shipments until mid-May, while Virgin Atlantic chief executive Corneel Kosterhas announced last week that the airline has about six weeks of secure jet-fuel supply.
International Energy Agency executive director Fatih Birol gave a similar six-week timeline on Europe’s jet-fuel supply.
“This is probably the worst crisis that the industry has ever seen,” McGill University aviation management lecturer John Gradek said. “We’re breaking new ground.”
European airlines could face jet fuel shortage by June if strait remains blocked, IEA warns
He expects flights to Britain and Southeast Asia to be particularly affected in yet another blow to Canadian travellers who have faced a cascade of travel disruptions this year.
While some European countries such as Germany can refine their own fuel, Britian is heavily dependent on imported aviation fuel, especially from the Mideast, Mr. Gradek said. Flights to places such as London would be particularly vulnerable to flight disruptions.
Parts of Asia, particularly the southeast, are in an even more fragile position as many countries rely exclusively on imported jet fuel from the war-torn region. “They have two or three weeks of fuel,” Mr. Gradek said.
Carriers are already responding by reducing fleets. “Thailand, South Korea have got carriers already parking airplanes and laying off staff and the same thing is happening in Vietnam – they’ve parked about 20 per cent of their fleet.”
Domestic flights in Canada and North America are expected to remain relatively stable. Canada has several jet-fuel refineries and supply chains are more secure. However, even domestically, the cascading effects of global travel disruptions may affect demand.
“Last month, domestic bookings accounted for a third of our bookings,” said Flight Centre Travel Group Canada spokesperson Amra Durakovic. “That’s something we’ve not seen in years.”
Ironically, as U.S. conflicts around the globe rise, the country itself may draw in more Canadian visitors as international options shrink. Year over year, “we’re typically seeing 40 per cent less travel to the U.S.,” Ms. Durakovic said. “What we saw last month was that gap has narrowed about 10 per cent.”
Despite disruptions to global travel, airlines still carry a contractual obligation to get passengers to their destinations. “Booking obligations don’t go away, they don’t disappear,” said Gabor Lukacs, president of advocacy group Air Passenger Rights. “Even if there’s an act of war.”
If an airline cancels a passenger’s flight because of fuel shortages, the carrier must still offer the choice to either a refund or rebooking on the next available flight, including with a competitor. “That rebooking might happen in a week or two weeks,” Mr. Lukacs said, but the obligation remains.
Under European rules, which apply if a passenger flies from or within Europe, travellers are also eligible to get their meal and accommodation costs covered if they’re unable to fly.
That said, there are lessons to draw from the start of the COVID-19 pandemic. At the time, amid unprecedented strain on operations, some carriers refused refunds and offered vouchers instead, despite legal obligations, Mr. Lukacs said.
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But enforcement can happen later. Quebec’s Superior Court certified a class action against Air Canada in January, which claimed that cancellations it attributed to safety during the two years after the pandemic outbreak were actually caused by staffing shortages under the airline’s control.
For now, travellers can take comfort in knowing that there have been no widespread disruptions to Canadians’ existing bookings, said Ms. Durakovic. She advised travellers to hold off on cancelling plans prematurely. They can lose money and airlines can be absolved of their responsibility to rebook or provide a refund if a passenger cancels first.
Travellers who already bought insurance should also make sure that their coverage will reimburse them for a fuel shortage.
“They might fall back that it is an act of war,” said insurance expert Martin Firestone, which many don’t cover.
For those on the fence about booking flights to Europe or Asia right now but know that they want to travel, Ms. Durakovic recommends locking in prices with a refundable ticket.
As the rapid escalation in global tensions has showed, waiting is a risky strategy. “The longer you wait, the more you will pay,” she said.
Even in a best-case scenario where jet-fuel supply stabilizes, prices are expected to plateau rather than fall and could rise further if demand surges.
“The capacity will in fact dictate the price,” said Mr. Gradek. As things stand, “there’s not enough capacity to meet the demand.”
