Global airlines cut flights as fuel prices soar

The Financial News reported that as the Iran War disrupts supply chains and oil remains stuck in storage facilities in the Middle East, pushing up global crude prices, airlines have begun cutting flights.
On the 6th (local time), Business Insider reported that jet fuel prices surged to 195 dollars per barrel late last month, jumping by nearly 100 dollars in just one month. It noted that airlines struggling to absorb the cost are moving to reduce flight frequencies, and some have already begun canceling services.
Unlike gasoline and similar fuels, jet fuel requires specialized storage facilities, and the overall storage capacity for it is smaller than for other petroleum products.
June Goh, an oil market analyst at Sparta Commodities, wrote on X (social network) that travel in many Asian countries is becoming significantly more expensive, with airlines adding fuel surcharges or canceling flights. Goh warned that Europe is also likely to face a jet fuel shortage soon and urged people to prepare for widespread flight disruptions.
Argus Media assessed that among European countries, the United Kingdom of Great Britain and Northern Ireland (UK) is the most exposed to shortages of jet fuel and diesel.
Ryanair, Europe’s largest airline, is also reviewing route reductions, saying it fears a jet fuel shortage if the Iran War continues.
A representative of Germany’s Lufthansa stated that the carrier has drawn up contingency plans for a worst-case scenario and may ground up to 40 aircraft.
Scandinavian Airlines System (SAS) has also decided to cut around 1,000 flights, mainly on short-haul routes within the Nordic region, and has temporarily raised fares.
In the United States of America (US), United Airlines Chief Executive Officer Scott Kirby informed employees that the airline will, in the short term, cut routes that have become unprofitable due to high fuel prices.
United Airlines plans to reduce flights over the next two quarters and will cancel certain off-peak and late-night routes.
Kirby expects that if current oil prices persist, the airline could face an additional annual burden of 11 billion dollars, or roughly 17 trillion won.
Air New Zealand plans to cut about 1,100 flights, equivalent to 5% of its services, and consolidate overlapping routes.
Vietnam Airlines has already suspended seven domestic routes this month. Reports say that if jet fuel prices rise to between 160 and 200 dollars per barrel, the carrier plans to cut its monthly flights by 10% to 20% next quarter.
Business Insider also reported that Bamboo Airways, another Vietnamese airline, will reduce its flight operations.

jjyoon@fnnews.com Yoon Jae-joon Reporter