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The UK is the most vulnerable country in Europe to potential jet fuel shortages as the Iran war throttles supplies from the Gulf, the boss of Ryanair has said.
Michael O’Leary, the chief executive of the budget airline, said Britain would be the most exposed to jet fuel shortages because it relies on Kuwait for about 25% of its supply.
“Of all the European countries at the moment, the one that is most vulnerable is the UK because of the market share that the Kuwaitis have here,” he said. “There could be a surplus of jet A-1 fuel in the Middle East, but you have still got to ship it to Europe and we don’t know when or how that happens.”
Airlines around the world have been forced to cancel some flights after the war in Iran triggered a surge in jet fuel prices.
Last week jet fuel averaged at $195 a barrel, according to the International Airport Transport Association, more than double the average last year. Prices have risen due to the strait of Hormuz being in effect closed. More than a fifth of the world’s oil normally passes through the strait.
Oil prices did ease back on Wednesday after Donald Trump said he wanted the war in Iran to end in the next “two to three weeks”. Brent crude, the international benchmark, slipped below $100, falling to $98.83 at one point – its lowest level in a week.
Ryanair said it had hedged 80% of its fuel costs until next March at $67 a barrel. However, O’Leary said the bigger problem for the airline would not be price, but supply disruption if the war continued.
“Nobody is willing to give us any assurances into June or July,” he said. “But if there’s a risk to 10% or 20% of the fuel supply in June, July or August, then we and all other airlines would have to start looking at cancelling some flights or taking some capacity out.”
He declined to rule out higher fares, saying that while there were no plans to put up prices, the company was “never in control of pricing”. He cited higher competition for short-haul journeys in Europe, especially over the Easter holidays and amid a switch in demand away from the Gulf and towards the continent.
Ryanair also repeated its call for the UK government to abolish air passenger duty (APD), a tax that increased on Wednesday to add £2 to the cost of a short-haul economy flight.
“This APD hike makes UK air travel even less competitive versus countries like Sweden, Hungary, Slovakia and regional Italy, where governments are abolishing enviro taxes and being rewarded with rapid traffic, tourism and jobs growth,” O’Leary said.
He added that the airline had taken on 29 new aircraft this summer, though only one had come to London.
Ryanair, which is headquartered in Swords, Ireland and is the biggest airline in Europe, employs more than 26,000 people around the world.
