Thousands of flights cancelled as jet fuel costs soar

 Airlines around the world are cancelling thousands of flights after the war in Iran caused jet fuel prices to more than double.

More than one in 20 flights scheduled to take off on Monday was cancelled, according to aviation analytics company Cirium.

That was almost twice the number this time last year and comes as conflict in the Middle East squeezes the global supply of jet fuel and sends prices surging.

Jet fuel cost $742 a metric tonne a year ago but has now topped $1,710. Prices are rising as the closure of the Strait of Hormuz, through which a fifth of the world’s oil passes, chokes off supply.

Prices are skyrocketing as oil prices continue to climb, with Brent crude reaching as high as $116 a barrel in early Monday trading.

Beyond higher prices, concerns are growing about shortages of jet fuel. More oil is required to refine a litre of jet fuel compared with petrol and diesel, meaning a squeeze on crude deals an outsized blow to the market.

The UK is set to receive its last-known shipment of jet fuel from the Middle East this week, according to the Financial Times.

Writing on X, Alex Macheras, an aviation analyst, warned that “a serious jet fuel shortage is less than a week away across multiple different markets”, including “at some major European airport hubs”.

Mr Macheras claimed airports were “informing airlines to prepare for a potential ‘no-fuel available here’ scenario”.

“This is not [just] a Europe problem – international airlines from Asia, South America, Africa … are working on contingency plans, which include attempted fuel stops en route to/from destination[s] as jet fuel shortage worsens to unprecedented levels [and] the price continues to surge.”

Airlines that have confirmed they will be cutting flights include Air New Zealand, which cut 1,100 flights through to early May, and Scandinavian group SAS, which is cancelling 1,000 next month. Both have said these will mainly affect domestic routes.

Last week, flag carrier Vietnam Airlines said it would need to cut flights by 10 ​to 20pc per month during the next quarter ⁠if jet fuel prices reach $160-$200 a barrel, according to state-run media reports. This would affect up to 18pc of its international flights and more than a quarter of its domestic network.

United Airlines became the first major US airline earlier this month to cancel flights because of soaring fuel costs, cutting about 5pc of capacity on routes that are less profitable for the company.

Scott Kirby, the chief executive of the US airline, which is the world’s biggest by capacity, told Bloomberg that passenger flight costs could soar by 20pc if jet fuel prices stay high.

Mr Kirby said: “If oil prices stayed where they are today, that’s $11bn of expense for us, and that would require prices to be up 20pc to break even, to cover that cost.

“Airfares are up 15-20pc in the last few weeks ... There will be less demand [and] fewer people travelling as prices go up.”

He predicted that in a worst-case scenario, oil prices would rise to as much as $175 a barrel and trade at more than $100 a barrel through 2027.

As well as fuel costs, the war in Iran is prompting flight cancellations as travel in the Middle East is disrupted. IAG-owned British Airways, Air France-KLM and Lufthansa are among several carriers that have cancelled flights scheduled to and from the region.

Close to 7pc of the 104,618 flights scheduled globally were cancelled on Monday, or 7,049 flights, according to Cirium.

On the same day last year, some 4,797 of 102,132 flights were cancelled, or 4.7pc.

The increase in cancellations is especially pronounced in North America, where 14.6pc of departing flights have been cancelled, compared with 4.4pc last year.