Strait of Hormuz Closes; European Jet Fuel Rises From $831 to $1,838 per Tonne

EasyJet hedged 80% of its fuel supply for the first half of the year at $717 per tonne, but finding the remainder at prevailing prices cost the airline an extra £25 million in March. A flight from London to Melbourne in June now costs 76% more than it did last year, according to consultancy Teneo. Air France KLM, Air Canada, and SAS have cut their summer schedules.

Lufthansa will remove 20,000 flights between now and the end of October, the company announced. Virgin Atlantic has introduced surcharges ranging from £50 on a return economy class ticket to £360 for a business class fare. United Airlines CEO Scott Kirby stated the company would do whatever it takes to recover 100% of the increase in jet fuel prices as quickly as possible.

IAG, which owns British Airways, Iberia, Aer Lingus, Vueling, and Level, has warned that travellers will have to pay more. Wizz Air CEO József Váradi stated that prices on short-haul services within Europe have been going down.

Government is preparing concessions, including allowing airlines to cancel flights at busy airports like Heathrow well in advance without losing take-off and landing slots. Under normal circumstances, airlines lose the right to use slots if they do not use them 80% of the time in a given season.

The European Commission has made it clear that cancellations and severe delays due to jet fuel shortages will qualify as exceptional circumstances. Under EU rules, airlines avoid paying financial compensation to passengers in exceptional circumstances, but passengers are still entitled to reimbursement or an alternative flight.

The European Commission is likely to ease rules restricting tankering.

Martin Lewis warned British holidaymakers that booking flights and accommodation separately risks no protection if flights are cancelled. Under package-travel rules, customers are generally entitled to a full refund if their flight is cancelled. Martin Lewis stated that payment protections such as Section 75 are unlikely to help in circumstances of flight cancellations due to jet-fuel disruption.

Martin Lewis's team reviewed 40 travel insurance policies and found only three or four would cover hotel losses caused by flight cancellations linked to jet-fuel disruption.