Thousands of flights grounded as fuel crisis hits
A global fuel crisis triggered by the ongoing US-Israel-Iran war has forced airlines worldwide to cancel thousands of flights and hike fares, with jet fuel prices surging more than 130% from a year ago amid the closure of the Strait of Hormuz.
Aviation analytics firm Cirium reports that more than one in 20 flights scheduled to depart Monday were cancelled, part of a broader wave of disruptions that has already seen tens of thousands of flights scrapped since the conflict escalated in late February.
The root cause is the effective blockade of the Strait of Hormuz, the narrow waterway through which about one-fifth of global oil passes, following Iranian actions in response to strikes on its territory.
This has choked crude supply chains, sending Brent crude to $116 per barrel in early Monday (30 March) trading and pushing jet fuel prices to $1,710 per metric tonne.
Airlines are feeling the pain immediately. Fuel typically accounts for roughly 30% of operating costs, and the spike has already prompted capacity cuts and fare increases.
- United Airlines, the first major US carrier to act, slashed about 5% of its capacity on less profitable routes earlier this month. CEO Scott Kirby has warned that sustained high prices could add as much as $11 billion in annual expenses and is modelling scenarios with oil at $175 per barrel.
- Air New Zealand has cancelled 1,100 flights through early May, mostly on domestic routes.
- Scandinavian carrier SAS is axing around 1,000 flights in April, again focused on shorter-haul services.
In Asia and the Middle East, the situation is more pronounced. Emirates, Etihad, and Qatar Airways have dramatically scaled back or suspended operations amid closed airspace and airport restrictions, contributing to over 4,000 daily cancellations in the Gulf region at peak disruption.
Vietnam’s civil aviation authority has warned of domestic fuel shortages, while Philippine President Ferdinand Marcos Jr. described plane groundings as a “distinct possibility” if supplies don’t improve.
Deutsche Bank analysts have called the crisis an “existential threat” to the industry’s weaker carriers, warning that without quick relief, airlines could be forced to ground thousands of aircraft globally. The bank noted that jet fuel refining margins have reached 20-year highs not seen since the aftermath of Hurricane Katrina.
Passengers are already seeing the impact in their wallets. Advance-purchase fares on some long-haul routes have more than doubled in recent weeks, with domestic and regional tickets up 200-300% in certain markets. Carriers are adding fuel surcharges where permitted, particularly on international flights.
The UK is still feeling secondary effects and the country is expected to receive its final known shipment of Middle East jet fuel this week, according to the Financial Times, while average diesel prices hit 179.9p per litre – up more than 35p since the war began.
Prime Minister Keir Starmer met on Monday with senior executives from HSBC, Goldman Sachs, and Shell to discuss de-escalation efforts; the government has so far ruled out immediate fuel duty cuts despite retailer calls for support.
