Budget holidays to Spain and Portugal could become a thing of the past for Britons as jet fuel prices hit record highs and airlines scale back capacity.
As the aviation industry enters its first winter since the outbreak of the Iran War, record-high fuel costs have led to airlines calling off hundreds of thousands of flights.
Customers with existing bookings either weeks or months away are being informed their departures have been grounded – many are not even rearranged for another date.
The winter period presents unique operating conditions as lower demand makes services more prone to higher costs, which now jeopardises the future of festive weekend getaways to popular holiday destinations from the UK, including Portugal and Spain.
Fuel prices surge
Since February, when the US-Israeli war with Iran war began, supply chain disruptions in the Strait of Hormuz have led to the rocketing cost of fuel, which in turn threatens narrow profit margins for airlines.
The International Air Transport Association has revealed that the price of a barrel of aviation fuel in Europe has almost doubled from $100 at the beginning of this year to $196.
EasyJet – Europe’s fifth biggest airline – claims its margins are as low as £6.08 per passenger and that coping with a further dramatic increase in fuel price is now no longer viable.
Only last month, Latvian airline airBaltic declared Chapter 11 bankruptcy as the cost of the Middle Eastern war “bites”.
Rico Luman, senior economist at ING, told The i Paper that the Iranian conflict has forced oil traders to “rush” and “ship oil from other locations to Europe”.
He said: “We’re currently seeing record high rates, which also keeps prices up. Oil products and jet fuel can still be delivered but it remains pricey into 2027 and logistical mismatches could occur.”
“Short haul flights are the most likely to be affected as they’re more fuel intensive at the start and landing, and also cruise less,” he added.
Currently, European jet fuel imports are operating at almost a third of their pre-war average, but consumption in the UK, Germany, France, Spain and Italy fell by just 0.2 per cent last year.
George Shaw, senior research analyst at Kpler, believes “we’re over the worst of the shortage”.
He said: “We’re coming across the end of the in-demand season so we should be well supplied.
“We have more [fuel] from East Asia and supplies from the US and Nigeria, so we shouldn’t anticipate shortages but expect prices to stay relatively high.”
Flight cancellations and reductions
So where and whom will be affected this winter?
Both easyJet and Ryanair – two of Europe’s low-cost airlines – have announced cuts to their winter schedule viewing it as cheaper to keep their aircrafts parked rather than run loss-making flights.
Ryanair intends to cut 2 million passengers during an “unprofitable winter” and are targeting mid-week flights in late November, early December and the middle of January – when demand is traditionally weaker.
The Irish airline said: “If high oil prices continue through to summer 2027, Ryanair believes short haul airfares in Europe will increase materially to reflect the higher prices.”
On the airline’s London Stansted-Palma route, Tuesday and Wednesday departures have been removed from the second week of November until the week before Christmas.
Last week, Kenton Jarvis, CEO of easyJet, said a further 700,000 seats would be removed from the website.
Alternatively, the airline – which offers more than 650 routes from 22 UK airports – appears to concentrate reductions on routes offering several daily departures, allowing passengers to use other services without major changes to their travel plans.
On its London Gatwick-Amsterdam route, easyJet offers up to six flights in each direction.
A cancelled 3.15pm departure would allow affected customers to travel on the 1.40pm or 6.05pm service instead.
Passengers affected by cancellations have rights to refunds or alternative flights, although airlines generally owe no additional compensation when providing at least 14 days’ notice.
Smaller airports at risk
Mike Malik, Chief Industry Officer at Cirium aviation, told The i Paper that in a fuel-shortage crisis, resources mostly reach larger hubs first as “that is where the volume and the commercial weight sit”.
He said: “Smaller airports have fewer supply routes, less storage and less flexibility, so they feel it first. Through this entire episode, no major hub anywhere has run dry.
“The risk sits in the structure rather than any one place.
“I would watch out for European refineries going into planned maintenance through the autumn – nobody has refilled the storage that got the continent through the spring,” he added.
Leeds Bradford Airport shows that some compact regional airports are trying to mitigate these risks.
REDS Group, a UK-based environmental services contractor and consultancy, announced three weeks ago that it had installed two new 200,000-litre aviation fuel storage tanks at the Yorkshire hub.
It said: “The result is increased fuel capacity, improved operational resilience and upgraded infrastructure designed to reduce environmental risk.”