The war in the Middle East puts the sector in crisis. Fewer viable routes and increasingly severe fuel shortages are driving up prices, with the increases expected to remain until at least the autumn.
The side effects of Middle Eastern war are brutally hitting the air traffic sector, just as the start of the summer season is only a few months away.
Added to the closure of airspaces of vital importance for trade routes catastrophic price increases in airline fuel costs, without forgetting the limited traffic in large hubs such as Abu Dhabi, Dubai and Doha.
The natural consequence is a general increase in operating costs, which is reflected in higher prices and less availability of planes for consumers. The situation, however, could be even more complicated.
Fuel shortage
The closure of Strait of Hormuzas is now known, suddenly removed almost a fifth of global crude oil from the market. Among the main products refined from petroleum is kerosene for aircraft.
This product, until the beginning of the war, was refined locally and also exported to Europe. The Old Continent, according to a report from Food and Agriculture Organization (FAO), imported up to 60% of its aviation fuel from Gulf countries Perch.
That import no longer exists, and the consequences were not long in arriving. The cost of jet fuel, as reported byInternational Air Transport Associationrecorded record surges, going from just over 800 dollars a ton to the current 1,550effectively doubling.
The situation is still manageable, but only in the short term. According to executives of the main airlines, including Easyjet and Air France, interviewed by the Financial Times, “fuel suppliers will not provide information on availability beyond next month”.
From May, therefore, aviation fuel could really start to run low.
Routes changed and hubs stopped
Fuel costs must be added increasingly compressed and irregular airways. The war in Ukraine had already marked a breaking point, with Russia and the West banning each other’s airlines from overflights of their respective airspace.
The current war in the Middle East caused the airspace of Iran, Iraq, Syria, Kuwait and Bahrain to be closed to all flightswhile only the national airlines venture into those of Israel, Jordan, Qatar and the United Arab Emirates.
Translated into timing, if before 2022 a flight from Frankfurt to Tokyo took 11/12 hours, flying over Russia, today the hours are at least 14, with an extra distance to cover that varies from 2000 to 3500 kilometers depending on the Middle Eastern airspaces to be avoided.
Increase in costs
The consequences on the cost of tickets are inevitable. According to an analysis by Alton Aviation Consultancycited by Bloomberg, ticket prices on key routes between Asia and Europe have already increased considerably, in some cases reaching the figure monsters of 560%and will remain high at least until the end of autumn.
Carriers such as Malaysia Airlines, All Nippon Airways and China Southern have introduced or increased specific fuel surchargesranging from 5 to over 380 dollars per ticket depending on the distance.
Even if the conflict eases in the short term, the effects on fuel prices and airfares are likely to persist.
The green limits
International environmental legislation also further complicates the economic picture of airlines. The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), adopted by ICAO in 2016, requires carriers to offset growth in CO₂ emissions above 85% of 2019 levels.
In the First Phase of the program (2024-2026), it is estimated that airlines will need to purchase over 200 million emission units for offsetting purposes, for a total cost estimated between 4 and 5 billion dollars; the cost of compliance for 2026 alone is projected at $1.7 billion.
Furthermore, from 2027, all international flights will be subject to compensation obligations, not just those between states that have voluntarily joined.
At a time when companies are already exhausted by fuel costs and extended routes, this additional financial burden risks proving unsustainable for many carriers, especially low-cost ones.
