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Chapter 1: What warning did the International Energy Agency give regarding jet fuel?
The head of the International Energy Agency has warned that Europe has maybe six weeks or so of jet fuel left, saying flight cancellations could happen soon if oil supplies remain blocked by the Iran war. Clearly, the US war against Iran is going to have an impact on the travel industry. So how much is it going to affect your summer holiday?
I'm joined by Cathy Adams, travel news features editor with The Times and The Sunday Times, and by aviation analyst Geoffrey Thomas. Cathy, good morning to you. I might start with you. Pretty sobering warning there from Fatih Birol of the International Energy Agency.
Yes, indeed. And, you know, it is very scary for, I think, everybody looking forward to, you know, a much needed summer holiday. I mean, I'll start and say that actually I've already had two flights cancelled this summer. And I know, and when I've asked about why they've been cancelled, you know, the reasons are a myriad. It could be that there's low demand.
It could be that, I mean, it could be because of the jet fuel issue. but I have already seen it happen to me.
Chapter 2: How will the jet fuel shortage affect your summer holiday plans?
So I know that it is happening. I've spent the past weeks talking to airlines, some of the biggest European airlines, about how they're feeling about it. And actually, the warning, it doesn't sound quite as bad, I think, as what we're hearing today. So EasyJet tell me that they're not seeing any cancellations.
Ryanair say that they do have OK visibility on fuel, but that if nothing is sorted, then yes, we should expect cancellations. British Airways says a very similar thing. Obviously, travel is a very volatile industry anyway. Stuff like this happens, you know, possibly not exactly the jet fuel issue, but there are always geopolitical problems.
There's always cancellations, you know, air traffic control delays we've seen in the past. So the travel industry is very used to things like this happening and external shocks, you know, are normal. But it does look like indeed that this is possibly a little bit scarier with, you know, very, very scary wording, isn't it, from Fatih Birol?
It sure is. But I'm kind of I'm interested in the fact that you've had two flights cancelled. I presume given your job, you do quite a bit of travelling. I do.
Chapter 3: What insights do airlines have about flight cancellations?
But it'd be a bit unusual at this time of year already to be getting cancellations, wouldn't it?
I'll be honest. It's never happened to me before. I have had flights cancelled, but they've been very much on the day cancellations. I've never had flights cancelled, you know, sort of six weeks before. eight weeks out. It hasn't so far caused me any consternation because I've just been rolled onto either a later flight or an earlier flight.
And I think what airlines are doing is sort of basically looking at their schedules and thinking, OK, which flights are less full, where the loading, which is the measure of how busy a flight is, where the loading is a little bit lower. Could we possibly just remove that from our schedule and then move planes around, possibly moving fleets
putting different airlines or different aircraft on routes, et cetera. But yeah, it hasn't, I mean, it's all been handled very well as well. I have to say, you know, these are both with British Airways, these particular flights. And I have, as I just said, just been rolled onto the next service, an earlier service. So, so far, there hasn't been a huge impact on me, I would say.
But it is unusual.
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Chapter 4: Which regions in Europe might face more jet fuel shortages?
It is unusual.
Yeah. And are there particular regions or areas that you might be watching out for from Europe that might be more prone to problems as the summer rolls on?
Well, I spoke to an analyst earlier this week, actually. And so, first of all, Europe is not as badly affected as, say, Asia. So Asia gets a lot of its jet fuel from the Middle East. And those are the areas, you know, actually in Asia. I've been in Korea, actually, for the past few days with Virgin Atlantic.
And in Korea, they're telling civil servants that they actually can't drive to work on specific days to conserve fuel. So things actually on the ground are kind of much worse in Asia. But yes, I spoke to an analyst this week about where in Europe actually could be the most affected. And at the start of April, four airports in northern Italy, they actually started rationing fuel annually.
for short-haul services, so prioritising long-haul services, ambulance services, medical jets, etc. He then said, he's called Brian Terry, and he then said that other major hubs, including Paris, Amsterdam, Copenhagen, they're already dipping into their reserves.
Mediterranean leisure airports as well, so Spanish islands, Greek islands, you know, southern Italy, they also operate with very thin fuel buffers.
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Chapter 5: What is the impact of the jet fuel situation on low-cost airlines?
So if stuff does happen, then it's those smaller airports that don't have the capacity to hold huge amounts of fuel that could be more affected.
OK, stay with us, Cathy, if you would. I want to bring in Geoffrey, Geoffrey Thomas, aviation analyst. Good morning, Geoffrey. Hey, David, how are you? Well, I'm a bit depressed, actually, after listening to Cathy and thinking of my summer holidays plans. This is a question of supply rather than price, is it?
Well, it's a bit of both. We know that 20% of the world's oil, whether that's in crude, whether it's refined into gasoline or petrol, if you like, or jet fuel or diesel, is cut off, essentially. that means 80% is still available.
And, you know, aside from contracts and fuel hedging and commitments and whatnot, there's a significant amount of fuel that is sold on the high seas, high seas cargo, and that goes to the highest bidder. So while 20% has been cut, there is still shipments available if you're prepared to pay for it. And there's, of course, obviously a lot of profiteering going on at this particular moment.
And it depends on different countries or different airlines' appetite for paying more for their fuel.
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Chapter 6: Are fuel surcharges likely to affect passengers this summer?
Now, low-cost airlines are more impacted simply because their passengers typically are more Price sensitive. That's not always the rule, but they are typically more price sensitive and therefore it's more of a challenge. Now, down under where I am in Australia, Jetstar has cancelled about 7%. That's a low cost airline, part of Qantas.
it's cut about 7% of its network in response to the jet fuel situation, whereas Qantas has only cancelled 1% of its flights. So I think that sort of situation is mirrored around the world. Then overlaid on that, you've got airlines like, say, Lufthansa or British Airways, who operate long-range flights to different parts of the world, and they can do what's called tanker fuel.
So when a British Airways flight goes to New York, say, an A380 for the five-hour flight back or six-hour flight back to London, it carries full fuel. Not the six hours it needs. It carries, you know, it carries full tanks, which would give it 13, 14, 15 hours of flying. So there's going to be tankering of fuel as well by airlines, depending on, you know, a variety of circumstances.
OK, so from the consumer point of view, Geoffrey, are people trying to take flights likely to be hit with surcharges, fuel surcharges?
Well, passengers, there are surcharges also in other parts of the world that the airfares have simply gone up.
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Chapter 7: What should travelers do about booking flights during this crisis?
It doesn't seem to be curbing the appetite to travel because this appetite for travel has come out of COVID, where after COVID, everybody wants to travel. And there seems to be an insatiable appetite to travel.
Right. So if you're prepared to pay the surcharge, you'll still get your flight. Are flights likely to be cancelled? I mean, Cathy's mentioned consolidation of routes.
Look, absolutely. Cathy's absolutely right. There will be cancellations. I had a cancellation last weekend. And so I know that definitely does happen down under as well. But yes, there will be consolidation everywhere. Also, airlines will look at their most efficient aircraft and they'll ground the least efficient and keep flying the most efficient. And like the new A350 or the new 787s,
and those sorts of aircraft like the A320neo from Airbus.
Chapter 8: Is the aviation industry moving towards sustainable fuel alternatives?
They'll be looking to the most efficient units in their fleet. They'll be looking to consolidate wherever they can, and that will mean disruptions to passengers, no doubt about it whatsoever.
Part of the problem, as I understand it, Geoffrey, and you'll correct me if I'm wrong, a lot of the oil coming through the Strait of Hormuz is going to Asia, which is why there's the measures Cathy mentioned about people not being allowed to drive and everything.
But Europe's supplies of jet fuel, as I understand it, a lot of that comes from that region, and that's why the problem for Europe exists.
Well, indeed. A large amount of the jet fuel for the United Kingdom comes from Kuwait, And that's a big problem. Whereas, for instance, if I can flip this to down under, 30% of the jet fuel for Australia comes from China. Now, that's an issue because China, you know, is having a problem getting its oil out of Iran.
So there's a myriad of scenarios that are playing out at the moment and there's no one... simple solution at all. It's a mixture of things that are going on.
Okay. Cathy, in terms of people who maybe have booked flights, maybe are thinking of booking flights, I mean, what's the advice? Should you book now? Should you try and lock in now?
Yes, absolutely. And everybody I've spoken to over the past week, be that agents, analysts, airlines, obviously airlines have a big agenda here. They do want to get people to book early. But I think that the advice does still stand. past data shows us that where flight prices go up, they very rarely come back down again.
So yes, my advice is if you are planning to travel this year into next year even, book your flight now. Lock in a good price because once you've booked, the airline does have a responsibility towards you. And therefore, even if they cancel your flight, they have to re-route you back onto one. So yes, if you're looking to travel, I really would advise to book now.
OK, and say, for instance, and I'm picking an example at random, but a radio presenter who's booked a flight to South America at the end of July. How am I fixed?
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