Fuel prices have surged, tensions in the Middle East and Iran's port closures have triggered a wave of flight cancellations on a wide scale. Millions' travel plans ahead of the May Day holiday face potential disruption. The International Air Transport Association (IATA) warns that even if the Hormuz Strait reopens and the Middle East conflict ends, global aviation fuel supply could take months to return to normal.
The situation has intensified as the International Energy Agency (IEA) warns Europe may have only six weeks of jet fuel left before shortages. Fatih Birol, chief executive of the IEA, said more flights could be canceled if oil supply from the Middle East is not restored within weeks.
According to Janiv Shah, a petroleum analyst at Rystad Energy, costs would hit 'unhedged' carriers the hardest—airlines that did not lock in fuel reserves before February 28 at fixed prices.
Even easyJet, which hedged 70% of its jet fuel demand at around $700 per tonne, though not at the current level of around $1,500 per tonne, is forecasting a £40 million hit this summer for every $100 rise in oil prices.
Facing the risk of disruption to aviation fuel supply during peak travel season, European airlines have urged the European Union to quickly implement emergency measures to safeguard transport operations. Major airlines such as Air France, Lufthansa and Ryanair have asked the European Union, via the European Airline Association, to activate emergency support measures.
Data from Hangban Guanjia shows that since April 1, flights on several routes including Xi'an-Phuket, Chongqing-Phuket and Yantai-Bangkok have been canceled through May. Routes to Oceania have also been heavily affected, with cancellation rates on Wuhan-Sydney and Guangzhou-Darwin above 50% in April, expected to rise in May.
For Chinese travelers, these cancellations are a concern as Southeast Asia had been seen as a cheaper alternative after they dropped Middle East options due to safety concerns, while Europe and Africa are hindered by distance and cost.
Similarly, the Middle East conflict and Hormuz closure have made travel between Europe and Japan more expensive; some flights have been canceled between major European and Japanese cities via Middle East hubs. Some regions of Japan have recorded declines in European visitors; in the Hida-Takayama region of Gifu prefecture, about 4,000 hotel bookings were canceled since late March, mostly from Europe. Minoru Nakahata, representative of the Hida-Takayama Hotel and Inn Cooperative, said losing European guests is a major challenge because revenue cannot easily be offset by other markets.
'We welcome large numbers from Spain, the United Kingdom, Italy, France, Germany and the Netherlands, and we also host many visitors from Israel. Unlike Japanese travelers who can decide to come at the last minute, European visitors have to plan well in advance even if the conflict ends,' he said.
Despite record international tourist arrivals last month, the economic fallout from the Middle East conflict is beginning to affect Japan. Recently, Air Canada announced it would suspend some flights to the United States due to soaring jet fuel costs; the carrier said the suspension would affect domestic and international routes, including Toronto to New York JFK, from June 1 to October 25.
The Toronto to Salt Lake route will be suspended from June 30 with operations expected to resume in 2027. Air Canada noted jet fuel prices have more than doubled since the conflict between the U.S., Israel and Iran flared up on February 28, making certain routes uneconomical to operate.
Further, travel and aviation disruptions from the Middle East conflict are weighing heavily on Cape Town’s tourism sector; local travel companies say instability and higher airfares are causing many travelers to cancel or postpone long-haul trips. Cancellations by frequent travelers and high-spending customers are forcing travel operators to tighten budgets and consider staff cuts if demand from the Middle East does not recover.
'There will be differences in travel spending in the future because travelers will have less disposable income for holidays and business trips, and corporate clients as well,' said Pieter Van Eck, CEO of Bon Hotels in South Africa.
