Lufthansa blamed soaring fuel costs for slashing summer schedule – as the boss of Brittany Ferries launches extraordinary attack on carriers for adding surcharges by calling it “the unacceptable face of capitalism”
German airline Lufthansa is axing 20,000 summer flights because of soaring jet fuel costs – as the EU looks to prevent shortages.
Lufthansa has joined around two dozen airlines that have now scaled back operations in the face of rocketing fuel bills.
It came as the boss of cross-Channel operator Brittany Ferries slammed airlines for imposing fuel surcharges on passengers – branding it “the unacceptable face of capitalism” and “profiteering”.
Lufthansa confirmed it was grounding 20,000 short-haul flights from its schedule through to October. The move is designed to save approximately 40,000 metric tons of jet fuel, the price of which has doubled since the outbreak of the Iran conflict.
The move will be targeted at routes that are unprofitable at the moment, and include its six hubs in Frankfurt, Munich, Zurich, Vienna, Brussels, and Rome. The first 120 daily flight cancellations took place earlier this week.
A wave of other airlines in the EU and elsewhere have already trimmed their schedules to save on jet fuel or because of disruption caused by the Middle East conflict.
They include British Airways, which is reducing flights to the Middle East when services resume, permanently dropping Jeddah as a destination, while adding capacity to India and Africa.
It plans to reduce services to Dubai, Doha and Tel Aviv to one daily flight from July 1, and to cut Riyadh services from two daily flights to one from mid‑May. Changes apply through the summer season that ends on October 24, with one Dubai service restarting on October 16.
Sister airline Iberia Express has cancelled flights to Tel Aviv through May 31. A spokesperson for IAG, owner of British Airways and Iberia, said it was “not seeing disruption to jet fuel supply in our main airports, but our airlines are already facing rising fuel costs.”
Ryanair boss Michael O’Leary said at the start of April his airline may be forced to cancel 10% of its flights this summer. He told ITV News: “We’re all facing an unknown scenario. And we are certainly looking at maybe having to cancel 5% to 10% of flights through May, June and July.”
Economist Thomas Pugh recently noted that some smaller airlines had already cancelled routes and added fuel surcharges. “It won’t be long before larger ones follow suit, as they have in Asia,” said Mr Pugh, of audit, tax and consulting firm RSM UK”, adding: “that’s demand destruction in action.”
Some airlines have already begun adding surcharges to help offset a jump in fuel costs. Virgin Atlantic has slapped on a £50 levy to economy fares, £180 on premium and £360 on first class.
Meanwhile, package holiday giant Tui has cut its full-year profit forecast due to uncertainty caused by the Iran war. TUI, which operates its own aircraft fleet and is exposed to travel disruptions and tight jet fuel supplies, joined airlines from easyJet to Wizz Air in warning of the negative impact of the conflict on profit margins.
European airlines are set to report their first-quarter results starting next week and analysts expect broad capacity cuts and further profit warnings as the impact of curtailed jet fuel supplies and spiralling costs roils the aviation sector worldwide.
It came as the European Union says it will provide guidance to airlines on how to handle issues such as airport slots and passenger rights in the event of jet fuel shortages because of the Iran war.
The bloc’s transport chief, Apostolos Tzitzikostas, said there were no shortages “as of today” but warned a prolonged blockage of the Strait of Hormuz would be “catastrophic” for Europe and the global economy.
About one-fifth of the world’s oil and liquefied natural gas transited Hormuz before the U.S. and Israel began bombing Iran on February 28. The EU imports 30% to 40% of its jet fuel needs, with about half coming from the Middle East.
The European Commission is due to present a broader package of energy and transport measures on Wednesday.
Tzitzikostas said: “If real supply issues arise, our emergency stocks must be put to best use. Any national release of fuel must be done in full transparency to avoid market distortions.” He added there were no signs of “widespread cancellations” in the coming weeks or months. The International Energy Agency warned last week that physical shortages could start as soon as June, but European airlines currently report only higher prices.
At the same time, there are more signs of the foreign travel fears boosting UK staycations. Dan Yates, founder of leading outdoor accommodation website, Pitchup.com, said: “While it’s too early to know whether current fuel supply concerns will have a direct impact on flight availability, we are already seeing clear signs that holidaymakers are planning flexibly, with a focus on fuel-free UK-based breaks, especially as rising fuel costs make car travel more expensive this spring and summer.”
Meanwhile, cross-Channel operator Brittany Ferries insisted there was “no chance” that summer holidays will be “ruined” by maritime fuel shortages.
The firm says its suppliers had guaranteed the free flow of all maritime fuels for its services from Portsmouth, Poole or Plymouth to five destinations in France, two in northern Spain and Guernsey in the Channel Islands.
“Today we make a clear promise to customers,” said Christophe Mathieu, chief executive of Brittany Ferries. “Firstly, if you have booked with us, or are considering doing so, we will get you to a beautiful and safe holiday destination this year. Period. Secondly, we will play no part in profiteering or seeking to recover losses from a gamble gone wrong, as some appear to be doing.
“The cost of our holidays rose by inflation earlier this year, and by inflation alone. There will be no further rises in the weeks or months ahead. Conflict or other global uncertainty should not be used as the basis for knee-jerk price hikes: it is absolutely the unacceptable face of capitalism.”
In the past fortnight, Brittany Ferries says it has seen a 37% increase in reservations covering travel in July and August.
