As predicted, this IS going to be a massive problem for Expats hoping to fly back for home visits. I've read often that the supply of aviation fuel was likely to be the big problem, and here it is. From the DT today . . . . First European airline cancels flights as jet fuel prices soar"Flag carrier for Denmark, Norway and Sweden to scrap hundreds of journeys this week. SAS is the largest carrier so far to cancel flights because of the jet fuel crisis Scandinavia’s largest airline has become the first major carrier in Europe to scrap flights because of surging fuel prices triggered by the US-Iran war.Scandinavian Airlines System (SAS), the flag carrier for Denmark, Norway and Sweden, said on Tuesday that it will scale back flights in response to the “sharp and sudden increase” in jet fuel costs. The Stockholm-based company said that the cancellations amount to hundreds of flights this week, although most of the services scrapped are on short routes within Scandinavia where alternative connections are available. “Given the ongoing situation in the Middle East, including the sharp and sudden increase in global fuel prices, we are taking measures to strengthen our resilience,” said a spokesman. “One such measure is a limited number of short-term flight cancellations.” The move is significant because SAS is the largest carrier so far to cancel flights because of the jet fuel crisis. SAS ferries around 25 million travellers around the world every year. Last week, Air New Zealand, which carries 16 million passengers a year, also cut flights because of the fuel surge. SAS’s decision to strike flights from its timetable will stoke concerns that the closure of the Strait of Hormuz could trigger a wider crisis among European airlines as the price of kerosene – the industry’s single biggest cost – makes flying unprofitable. About half of European jet fuel imports normally pass through the Strait, with Kuwait and Saudi Arabia among major suppliers. However, SAS has been an outlier among European operators in recent years, “hedging” less of its fuel requirements to save money. SAS said in February last year that it was hedged on none of its fuel needs for the following 12 months after dropping rules that had required coverage on at least 40pc of consumption. It is not clear where the carrier’s hedging stands for the current year. Fuel-hedging protectionsWithout the hedges, which guarantee access to fuel at a specified price, airlines are fully exposed to fluctuations in crude oil prices, which surged to a four-year high following the start of the US and Israeli war on Iran. International Airlines Group, which owns British Airways (BA), said last week it was largely safeguarded from oil price fluctuations for now, with 80pc of its fuel needs hedged for the rest of March and 70pc for the second quarter. Low-cost carriers have some of the most comprehensive fuel-hedging policies in place. Ryanair revealed in January that it was 84pc hedged at $77 a barrel for the current quarter and 80pc hedged at $67 for the whole of the fiscal year beginning in April. Experts have nevertheless warned that even those airlines which are well protected could be forced to increase fares for passengers once those hedging protections expire. IAG’s hedging cover drops to less than 60pc of its anticipated needs for the busiest summer months, meaning that BA’s fuel bill could skyrocket if hostilities in the Middle East persist. SAS had already hiked its fares in a bid to pass on rising fuel costs to passengers, having said that the “magnitude” of the increase was too great for it to absorb. Major carriers including Air France-KLM, Cathay Pacific and Qantas have done likewise, while stopping short of slashing services." Thanks again Donald !
