Europe’s regional airports may not survive the current fuel crisis, as carriers cut routes amid record-high jet fuel prices and potential shortages.
Speaking to The Guardian, the Airports Council of Europe said smaller airports are facing an “existential threat,” pointing to Lufthansa’s decision to cancel 20,000 flights and shutter CityLine, its regional subsidiary.
“The current levels of jet fuel prices and the prospect of a new cost-of-living crisis mean that many regional airports across our continent are likely to face both a supply and demand shock,” Olivier Jankovec, the organization’s director general, told the publication.
Reuters reports that jet fuel has now topped $200 USD per barrel.
Europe is also seeing the end of oil imports from the Middle East as the last shipments to pass through the Strait of Hormuz, which has been closed since the US and Israel attacked Iran in February, reach their destinations. And while oil imports from the US are being ramped up, it’s unclear if demand can be met.
Earlier this week, SG Commodities Research, a division of the French bank Société Générale, predicted severe fuel shortages would hit Europe this June.
As reported by The Globe and Mail, Europe could stave off severe jet fuel shortages until August if it replaces 75% of the current shortfall with alternative suppliers, like the US. However, SG said it's unlikely the EU will be able to compensate for more than 50% of lost imports.
“Higher airfares have yet to curb demand meaningfully,” the research organization noted.
Other financial organizations, such as JP Morgan, have also predicted that European jet fuel shortages will hit in June.
In the meantime, travellers are getting mixed messages, with airlines often saying there’s no reason for concern while simultaneously cutting capacity.
Carriers such as British Airways, Transavia, Turkish Airlines, Aegean Airlines, EasyJet, Norse Atlantic Airways, Ryanair, Aer Lingus and SAS have all cut routes in recent weeks.
As reported by Open Jaw, Dutch airline KLM has also cancelled more than 160 European flights, telling The Independent they were “no longer financially viable” due to the rising cost of kerosene.
However, industry analysts point out that few long-haul flights are being impacted by capacity reductions. “The good news is that the marquee destinations of the world aren't losing airline service, or even many flights,” Mike Arnot, an airline industry consultant, told Condé Nast Traveller.
That's not good news for regional airports, Jankovec said, noting small airports have never returned to pre-pandemic passenger numbers.
