With the announcement of airlines axing two million seats in May due to jet fuel shortages caused by the Iran war, holidaymakers need to be on the ball and ready to act if affected by flight cancellations.
The blockade of the Strait of Hormuz, preventing oil tankers from delivering crucial supplies to Europe (estimated to be around 30 to 40 per cent of European jet fuel), is likely to have widespread travel implications – including potential price rises.
Britain is considered to be particularly vulnerable to shortages, according to a report issued this week by Goldman Sachs, which warned that supplies in the UK, the largest net importer of jet fuel in Europe, were already ‘critically low’ with a possibility of imminent rationing.
However, aviation experts say that increased deliveries of jet fuel from the US make this unlikely, and chances are most holidays will go ahead without interruption. That said, travellers need to be on guard in case events spiral further. Nobody is absolutely sure how things will pan out.
So here’s our ultimate guide to all you need to know with the jet fuel shortages and holidays for the weeks ahead.
A plane takes off from Lisbon Airport in Portugal yesterday as jet fuel prices continue to rise
Q I have travel plans. Will my flight be cancelled?
A Quite possibly.
Airlines such as KLM, SAS, Air New Zealand, Delta and Lufthansa have already announced cancellations – the latter is removing no fewer than 20,000 flights from its schedule.
The likelihood is other airlines will follow suit: instead of operating, say, three flights a day to a city in the US, running perhaps only one or two and consolidating passengers on those aircraft.
Q How can that be fair – I’ve bought my ticket, after all?
A Normally it would not be fair.
However, for flights into and out of UK airports, this week the Transport Secretary Heidi Alexander relaxed the ‘use-it-or-lose-it’ rules that usually force airlines to operate 80 per cent of their highly sought after take-off/landing slots.
This will be in place for the foreseeable future.
Q So do I need to contact my airline to find out what’s happening?
A No. Your airline will contact you if you are affected. If it doesn’t, you will be fine.
Q When can I expect to be contacted?
A This is a grey area.
However, Paul Charles, aviation expert and CEO of The PC Agency travel consultancy, expects airlines will probably contact travellers between four to eight weeks before travel.
Around four weeks ahead is most likely, and the government’s relaxation of take off/landing rules has given the green light to carriers to get on with planning to alert customers in good time.
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Q Why are some airlines cutting flights and others not?
A Because many cannot handle rising jet fuel costs, while others – including budget airlines such as Ryanair, Easyjet and Wizz Air – have cannily ‘hedged’ fuel purchases, buying at lower rates well in advance.
The bottom line, however, is grim.
Market analysis by Barron’s indicates that jet fuel prices have increased by 70 to 110 per cent since the Iran war began on February 28. This compares to 50 per cent for crude oil.
Fuel accounts for around 25 per cent of most airlines’ costs.
Some airlines are understandably nervous and making cutbacks to protect their positions in the event of prices rising even further.
Q Which destinations are most likely to be affected?
A Long-haul journeys are much more likely to be cut, with short-haul services probably OK.
The reason is that long-haul flights use up more fuel and there could be supply issues at destinations – plus some routes to Asia and Down Under require diversions around the Middle East, thus requiring more fuel.
Q What if I’m flying to, say, a small Greek island and my outbound flight is cancelled due to a shortage of aviation fuel on the island?
A This is unlikely as most airlines on short-haul routes will be able to fuel up enough to travel out and return on one tank. You should be ok.
Q What happens if I’m abroad and fuel runs out at my destination and I can’t get home?
A This is very unlikely to happen as airlines are warned around a week in advance of such a supply shortage.
In this instance – most likely on a long-haul trip to somewhere remote – passengers would be contacted and flights brought forward.
You might lose part of your holiday, but ought to be able to claim for this on your travel insurance.
Q What are my rights if an airline cancels a flight?
A You are entitled to a full refund or a replacement flight to get you to your destination.
You are also due compensation of between £110 and £520, depending on flight distance, if the service is cancelled less than 14 days before departure.
For details see ‘Claim compensation if your flight’s delayed or cancelled’ at citizensadvice.org.uk.
Q I haven’t bought my summer holiday flights yet, are airline fares going up?
A Yes. It’s estimated that flight prices have risen by 24 per cent year on year, according to the consultancy Teneo.
This is partially due to fuel prices rises, and also as carriers have cut flights, meaning a reduced supply of seats.
Some airlines have been increasing charges for add-ons such as oversized baggage and checked baggage.
However, it is also possible that some fares offered by low-cost carriers that have bought supplies of cheap jet fuel in advance will keep prices low to attract customers and increase their market share this summer.
Q Do you have any examples of airlines that are increasing fares?
A Yes. The International Airlines Group, which owns British Airways, Iberia and Aer Lingus, has said it will make ‘pricing adjustments’.
Meanwhile, Virgin Atlantic has more specifically said that it is adding £50 to economy-class return flights, £180 to premium economy and £360 to business-class.
Q I’ve heard talk of ‘fuel surcharges’ – does this mean airlines can retrospectively increase fares after you’ve bought your ticket?
A No. You have purchased your seats as advertised and the airline cannot turn around and slap on extra subsequent charges.
When the term ‘fuel surcharge’ is used by an airline, this is referring to new bookings only and it just means prices are going up.
So, the term is something of a misnomer, even though it has often been bandied about in discussions about the Middle East conflict.
Q How will rising jet fuel prices affect package holidays?
A Package holidays come under different rules to flights bought directly from airlines. Under the Package Travel Regulations (2018) it is possible for tour operators to charge 8 per cent more to your holiday price if unexpected costs arise such as jet fuel, taxes or fluctuating exchange rates.
For a trip costing £700 this ‘holiday surcharge’ would be £56, or £120 for a £1,500 getaway, or £400 for a £5,000 break.
But the law stipulates tour operators can only make this demand more than 20 days before departure.
Furthermore, the Package Travel Regulations rules are that if a company increases a previously set price by more than 8 per cent you have the right to cancel or receive a full refund.
Q Have any tour operators introduced ‘holiday surcharges’ yet?
A No – and the good news is that Tui, Jet2, Kuoni and Loveholidays have already stated they will not add a surcharge to existing bookings.
Q Should I bag a package holiday now or wait till closer to the summer?
A The best advice is to snag a getaway now, rather than risk fares soaring if the price of jet fuel rises further during a prolonged conflict.
Q What else should I look out for?
A If you are arranging a DIY holiday – booking flights, hotels and car hire separately, rather than in a package – you need to be careful.
This is because, if an airline cancels a flight and you are put on a later flight, you could arrive at a destination after the car rental office is closed.
There is another concern with hotel bookings, especially if you are put on a flight on a later day – which is feasible on some long-haul routes.
Best to book properties with flexible cancellation policies.
