European airline chiefs warned yesterday that a prolonged conflict in the Middle East would lead to higher air fares as flight cancellations drive up costs and aviation fuel prices, with some carriers even flagging risks to jet fuel supplies.
“The longer it goes on, the bleaker it will look,” Ryanair chief executive officer Michael O’Leary told Reuters on the sidelines of an aviation conference.
The Middle East conflict, now well into its third week, has thrown aviation into turmoil, with flights cancelled or rerouted thousands of miles and most airspace over the Gulf still closed amid fears of missile and drone attacks.
Jet fuel prices have spiked, pushing up operating costs, with European prices doubling and Asian prices up almost 80 per cent since US and Israeli strikes on Iran began in late February.
Most European airlines are shielded by fuel hedges, but those contracts expire in the coming months, and CEOs at the annual Airlines for Europe (A4E) summit warned that Europe will not remain immune to the oil price shock hitting other carriers.
The airlines chiefs urged the EU to postpone the “broken” parts of its green agenda, warning of higher fares due to the conflict in the Middle East, but the bloc swiftly rejected any delays saying climate targets remained on track.
“We have a path that we need to follow. We continue with our targets and the industry needs to invest,” EU commissioner for sustainable transport and tourism Apostolos Tzitzikostas told Reuters.
The A4E lobbying group had urged regulators, amid scant supply and high costs, to roll back mandates for the use of synthetic sustainable jet fuel (eSAF) starting in 2030, confirming a Reuters report.
“We are calling for the eSAF mandate to be postponed until eSAF is actually available,” easyJet CEO Kenton Jarvis told a news conference.
Air France-KLM, Ryanair and other major carriers have for years lamented the green fuel mandate as imposing an unequal burden on Europe’s airlines, allowing Asian and Middle Eastern carriers a cost advantage.
The green jet fuel industry and environmental groups insist the shift is necessary to reduce the sector’s reliance on oil.
Air France-KLM and SAS have already said they will have to increase ticket prices.
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