Lufthansa cuts 20,000 flights as Iran war doubles jet fuel costs, EU faces energy shortage

German airline Lufthansa on Tuesday said it would cut 20,000 short-haul flights over the next six months as the US-Israel war with Iran drives up fuel prices, making many journeys "unprofitable” for them, reported the BBC.

The price of jet fuel has doubled since the start of the war in West Asia in late February, with production and transportation facing frequent disruption. And airlines are particularly vulnerable to fuel price shocks as jet fuel is one of their largest operating expenses.

Several other airlines, including Air France–KLM and Delta, have also temporarily cut flights, while many have raised ticket prices as they pass on expenses to customers. If the war continues, travellers could expect higher ticket prices and more frequent flight cancellations ahead of the peak summer season.

The Gulf accounts for roughly 50% of Europe’s fuel imports—the bulk of which is transported through the Strait of Hormuz, which has been shut in response to US and Israeli attacks on Iran.

Routes Shut

The Lufthansa Group said the cancellation of less profitable routes, predominantly from airports in the German cities of Frankfurt and Munich, would save approximately 40,000 metric tons of jet fuel. Last week, the company shut down one of its regional subsidiaries, CityLine, to cut costs.

This means the airline will temporarily stop flying to and from Heringsdorf, Cork, Gdańsk, Ljubljana, Rijeka, Sibiu, Stuttgart, Trondheim, Tivat, and Wrocław, BBC reported.

The company will either refund affected passengers or book them on alternative flights with one of its other airlines – SWISS, Austrian Airlines, Brussels Airlines, and ITA Airways.

Energy Shortage

On 16 April, the head of the International Energy Agency (IEA) estimated that Europe had about 6 weeks' worth of jet fuel left and warned that airlines would begin to cut routes without more.

The European Union’s EU Energy Commissioner Dan Jørgensen also warned that the energy crisis triggered by the war in West Asia was “not short-term” and asserted that it was costing Europe around 500 million euros ($600 million) each day, Associated Press reported.

Meanwhile, Lufthansa said that 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.”

At least 20 airlines spanning key regions have cancelled flights scheduled in May, according to aviation analytics firm Cirium. Apart from 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.

The global price of jet fuel has more than doubled from about $99 per barrel at the end of February to $209 a barrel at the beginning of April.