UK Government Announces Temporary Airline Slot-Sharing Policy in Response to Jet Fuel Price Surge

LONDON (Substrate) -- The UK government announced on Sunday plans to temporarily allow airlines to consolidate passengers onto fewer planes over the summer holiday season. The measure would enable carriers to combine schedules on routes with multiple flights to the same destination on the same day.

Airlines could then give back some take-off and landing slots without losing them the following season.

These contingency preparations aim to give families greater confidence when traveling this summer by enabling airlines to plan realistically and lock in schedules earlier, the government stated. People would be less likely to face short-notice changes at the airport. Carriers could move passengers onto similar services much earlier, helping avoid stressful delays.

The plan would prevent airlines from running flights that have not sold a significant proportion of tickets. It would also reduce wasted fuel from flying near-empty planes. Since the closure of the Strait of Hormuz, the government has been monitoring jet fuel supplies daily and working with airlines, airports and fuel suppliers to stay ahead of any problems.

The Iran war began in February. The Strait of Hormuz was blockaded after the war in the Middle East started. The average price of jet fuel surged to $179 per barrel for the week ending April 24, according to the International Air Travel Association's Jet Fuel Price Monitor.

Ryanair CEO Michael O'Leary spoke to CNBC on Thursday. His airline hedged 80% of its fuel, he said. European airlines will fail if jet fuel prices remain elevated over the summer, O'Leary stated. "We are protected because we hedged 80% of our fuel, but there will be real failures if the price of jet fuel does not fall," O'Leary told CNBC.

U.S. budget carrier Spirit Airlines shut down on Saturday. The airline failed to secure an agreement with bondholders on an 11th-hour bailout from the Trump administration. Soaring costs, including for fuel, compounded years of problems for the carrier.

"There are no immediate supply issues," UK Transport Secretary Heidi Alexander said. The government has coordinated closely with industry partners since the blockade. Airlines would be allowed to avoid flying planes with large numbers of empty seats under the new rules.

Tim Alderslade, CEO of Airlines UK, welcomed the proposal. UK airlines continue to operate normally and are not experiencing issues with jet fuel supply, he said.