Lufthansa Cuts 20,000 Flights As War Squeezes Fuel Prices And Supplies

 

Las Vegas: The German company that owns Lufthansa Airlines and other European carriers said Tuesday that it would cut 20,000 short-haul flights through October as the Iran war drives up oil prices and deepens worries that some countries may run low on jet fuel.

 

The Lufthansa Group said the cancellation of less profitable routes, focused largely on its hub airports in the German cities of Frankfurt and Munich, would save the equivalent of approximately 40,000 metric tons of jet fuel.

The company last week shut down one of its regional subsidiaries, CityLine, to cut costs. It said a "planned consolidation" within its European network also would involve Lufthansa Airlines, Austrian Airlines, Brussels Airlines, SWISS and ITA Airways, and hubs in Brussels, Rome, Vienna and Zurich.

The price of jet fuel has more than doubled in some markets since late February, when the war began with U.S. and Israeli strikes on Iran. Airlines are particularly vulnerable to fuel price shocks because jet fuel typically accounts for one of their largest operating expenses.

 

For travellers, that is already translating into fewer flight options on some routes and higher fees and fares heading into the peak summer season, with many airlines raising checked bag fees or adding fuel surcharges.

Fighting around the Strait of Hormuz, a waterway off Iran's coast where a fifth of the world's oil typically passes, has disrupted fuel prices and supplies around the world.

The head of the International Energy Agency estimated on April 16 that Europe had about 6 weeks' worth of jet fuel remaining and said airlines would start to cut routes from their schedules without more. The European Union's top energy official is also warning that the energy crisis sparked by the war could impact prices for months "or maybe even years to come.

 

"This is not a short-term, small increase in prices," EU Energy Commissioner Dan Jørgensen said Wednesday.

Jørgensen said the war is costing Europe around 500 million euros ($600 million) each day."Even in a best-case scenario," he said, "it's still bad."

 

Jørgensen also told reporters that EU governments "are very worried" about possible jet fuel shortages. He says the European Commission is doing what it can to help but that Europe is mostly in defensive mode.

Lufthansa, meanwhile, said it has secured enough jet fuel "for the coming weeks" and was "pursuing a range of measures" to keep its fuel supply stable for the summer, "including the physical procurement of jet fuel."

All but one of the world's 20 largest airlines have cancelled scheduled May flights spanning every major region, according to aviation analytics firm Cirium. Besides Lufthansa, the carriers include Delta Air Lines, United Airlines, American Airlines, Air Canada, Emirates, Qatar Airways, Air China, British Airways and Air France-KLM, Cirium said.

Last week, Switzerland-based carrier Edelweiss Air announced it is dropping service to Denver and Seattle this summer and reducing flights to Las Vegas through the early autumn.