How the Iran war is decimating UK aviation as airlines goes bust,
As summer holiday chaos looms, and the Iran war continues to dry up jet fuel supplies and send flight prices soaring, the UK’s aviation industry is being decimated.
The Prime Minister even warned Brits may need to change their summer holiday plans because of the jet fuel crisis.
And now, in a string of closures, another British airline has gone bust – and it has blamed the ongoing Middle East war and increase in jet fuel prices for the situation.
Ascend Airways, which operated flights from major UK hubs such as Gatwick Airport and Stansted Airport, has cancelled all its flights effective immediately – with 161 jobs affected.
The ‘wet-lease’ carrier, a British ACMI (Aircraft, Crew, Maintenance and Insurance) and charter airline, previously provided aircraft for other organisations.
This includes carriers such as Tui Airways, Oman Air and Air Sierra Leone.
But now the airline, part of Avia Solutions Group (ASG), has filed for administration and surrendered its UK air operator’s certificate (AOC), according to The Sun.
Plus, it has returned its fleet of six Boeing 737 MAX 8 aircraft to its lessors, according to Economy Class And Beyond.
The Prime Minister has warned the jet fuel crisis may affect British holidaymakers
It comes as UK-based airline Ascend Airways has surrendered its operation certificate
It comes after another UK airline, Ecojet, entered liquidation just a few years after launching – and it never got a single plane in the air.
The Scottish carrier was founded by controverisial British entrepreneur – andJust Stop Oil backer – Dale Vince in 2023 who had big plans for it to be the ‘world’s first electric airline’.
However, the airline has now closed down after it reportedly tried to raise £20million, according to the Express.
Ecojet had not yet launched any flights, but had planned routes between Southampton and Edinburgh on planes retrofitted with hydrogen-electric engines.
It also intended to spread its wings further afield to mainland Europe and had long-haul trips to the likes of the US and Asia as the ultimate goal.
Other airlines across Europe have been affected by the crisis, too, causing a knock-on effect in the UK.
German airline Lufthansa has axed 20,000 summer flights in Europe due to rising fuel prices making many journeys ‘unprofitable’.
The 20,000 cancellations will affect hubs operating in Frankfurt, Munich, Zurich, Vienna, Brussels and Rome and ‘reduce the number of unprofitable short-haul flights’.
Should the government step in to save struggling UK airlines or let the market decide their fate?
It comes after Scottish carrier Ecojet stopped all of its flights and went bust
Lufthansa has axed 20,000 of its flights, affecting key hubs across Europe
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Jet 2 says holidaymakers are leaving bookings until the last minute amid fears over Iran war
Explaining the move, Lufthansa said jet fuel costs have ‘doubled since the outbreak of the Iran conflict’.
On top of that, many airlines have announced that they will operate fewer flights to the UK.
Trade body Airlines UK said ministers have to make preparations now if they want to avoid disruption later, warning of the ‘immediate impact on the UK aviation sector and UK consumers in the event disruption to jet fuel supply continues or worsens’.
KLM, Air Canada, Asiana Airlines, Delta Airlines and Lufthansa are among those who may run fewer routes to the country.
KLM, for example, has cancelled UK flights to major European destinations – with the airline saying it will overall operate 80 fewer return flights to and from Schiphol, which is less than 1 per cent of its European flights during that period.
This will include destinations KLM serves many times a day, including London.
Meanwhile, the Express reported the other airlines will reduce the number of flights operating in and out of the UK – although exact details and cancellations have not yet been confirmed.
As such, Sir Keir Starmer said people might need to rethink ‘where they go on holiday this year’ if the Iran war continues to impact airlines, which have already been raising fares and fees.
Plus, Dutch carrier KLM announced that it cancelled 160 flights in the next month
The jet fuel price increased from about $99 (£73) per barrel at the end of February to as high as $209 (£155) at the start of April – although it has fallen in recent weeks to $179 (£132), according to the latest International Air Transport Association data.
Some airlines have already begun hiking fares and reducing services because of their reliance on imported fuel, amid warnings a ‘systemic’ shortage could be on the way.
And Chris Harrington, managing director and travel expert at hoppa, says this spells disaster for smaller carriers in the UK.
Chris said: ‘For those operating on thinner margins, this can be catastrophic.
‘The sudden spike in fuel costs can wipe out profitability, and once you factor in weaker cash flow and ongoing disruption, it can become very difficult for these smaller airlines to stay afloat.
‘The longer this continues, the more likely it is that other airlines will fall into liquidation, just like we’ve seen with Ascend Airways.
‘In the travel industry, April is usually one of the peak months for summer holiday bookings, but I expect this year’s data will show the opposite. With no signs of the conflict ending anytime soon, I predict disruption will continue further into the year.’
If, as Chris predicts, the war and jet fuel crisis continue, this might not be the end of the decimation of UK aviation.
The jet fuel crisis has affected airlines across Europe, with shortages and high prices
Chris Harrington, managing director and travel expert at hoppa, warned of the crisis affecting the UK aviation industry
Christian Petzold, travel and tourism expert at TheTeamTrip, also weighed in on the matter
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On the one hand, the GOV.UK website says: ‘UK airlines say that they are not currently seeing a shortage of jet fuel. The government is working with industry and international partners to keep passengers moving.
‘There is no current need for passengers to change their travel plans. UK airlines buy jet fuel in advance, and airports maintain stocks to support their resilience.’
However, some airlines have still been reportedly affected as of late – and experts have warned the industry is seeing a huge impact.
So, why is this affecting the UK so badly?
Small airlines, or those with small margins, across the UK aviation sector are particularly vulnerable due to a combination of high external costs and structural weaknesses.
Christian Petzold, travel and tourism expert at TheTeamTrip, told the Daily Mail: ‘Jet fuel prices have increased so much due to increasing external costs and the internal weakness in structural aspects of the UK aviation industry.
‘Therefore, when you add these two together the threat to low margin carriers becomes extreme and this is the reason we see carriers struggling financially, collapsing or being sold off at auction.’
Differences between UK and European aviation have also underlined weaknesses – in conjunction with different aviation tax systems.
Christian added: ‘Additionally, all UK-based airlines experience heavy regulatory/tax/airport cost burden than do many of its European competitor airlines.
‘These differences will reduce the ability of UK airlines to absorb external shock impacts to their financial performance.’
Plus, he adds that already struggling airlines could crumble amid the ongoing war.
He said: ‘Once a carrier loses sufficient liquidity, high jet fuel prices over an extended period may cause a company to fail and enter liquidation, similar to what was observed by recent failures of Ascend Airways.’
As a result, the closure of small airlines Ascend Airways and Ecojet is indicative of the crisis the UK aviation sector is under.
And, as the experts have warned, unless the war and jet fuel crisis ends soon, this may not be the end of the road.
The Daily Mail has contacted Ascend Airways for comment.
