The owner of British Airways has said its fuel supplies will hold out over the summer despite the disruption caused by the Iran war.
IAG said in its quarterly trading update that it expects prices to rise and warned its profits will be lower as a result of Iran’s blockade of the Strait of Hormuz.
European authorities are scrambling for solutions to prevent broad aviation disruptions this summer after European airlines have warned of jet fuel shortages within weeks as a result of the Iran war.
Jet fuel exports from the five Gulf states fell by about 80 per cent in March during the Iran war as part of a wider disruption that wiped more than 10 million barrels a day from global oil supply.
The continent is more dependent on jet fuel imports, with some 75 per cent from the Middle East, than for any other transport fuel.
But IAG, which is also the parent company of Iberia, Aer Lingus, Vueling and LEVEL, said a strong supply chain and local arrangements at its main hubs will keep fuel supplies flowing.
UK airlines buy jet fuel in advance, and airports maintain stocks to see them through periods when supplies are threatened. IAG says it has advance purchases in place for 70 per cent of its fuel needs this year.
British Airways said that “based on what we know today, we are confident of jet fuel supply in our main markets throughout the summer”.
“Today, the situation is more about the price of fuel than availability,” the company says.
“If the current conflict continues to restrict flows of both crude oil and jet fuel from the Middle East, there is the potential for supplies of jet fuel to be restricted on a global basis.
“We are engaging with governments in each of our home markets as well as with the EU to ensure that the industry is getting the support it needs to navigate this situation.”
The company’s chief executive Luis Gallego added: “We currently see no issues with fuel availability in our main markets, particularly as we benefit from our investment in fuel self-supply at our hubs.”
The European Commission has now confirmed the price of a ticket that has been sold cannot be increased retroactively to reflect increased fuel costs.
Meanwhile, French Transport Minister Philippe Tabarot said he did not expect large numbers of flight cancellations this summer by airlines due to a shortage of jet fuel.
Most airlines have no interest in cancelling flights during the summer when they make most of their revenue, although some have slightly reduced their traffic, he said.
The French government is preparing aid measures to support airlines, such as deferrals of social security contributions, extended tax payment deadlines and flexibility on fuel loads.
