If widespread fears come true, flying could become an ordeal for passengers in the coming weeks and months. If, as a result of the Iran war and the ongoing blockade of the Strait of Hormuz, jet fuel shortages begin to occur, significant disruption to air traffic is likely. Both the International Air Transport Association (IATA) and the International Energy Agency (IEA) have recently issued dire warnings to this effect.
Airlines transfer price increases to passengers
Jet fuel shortages are already affecting air travelers: Amid a sharp rise in kerosene prices, many airlines around the world are passing on at least part of the increased costs to their customers. The erosion of passenger rights is exemplified by the Spanish airline Volotia: for several weeks now, its customers have been expecting a surcharge of up to €14 ($16.50), to be imposed seven days before departure, depending on the evolution of kerosene prices. Volotia added a related clause to its terms and conditions.
Fecua – the Spanish consumer protection organization – considers this illegal, accusing the airline of a lack of transparency in its pricing and has filed a formal complaint. “If this is not stopped quickly, there is a risk that other airlines could commit similar violations,” says Ruben Sanchez, head of FACUA.
But high ticket prices are not the only problem passengers are facing. On top of that, there is a risk of mass flight cancellations if jet fuel supplies begin to falter, as is already the case in parts of Asia. The International Air Transport Association (IATA) has warned that a similar scenario is emerging in Europe as the summer holiday season begins.
In anticipation of a potential shortage, many airlines around the world have already begun reducing their schedules as a precaution. Recently, Lufthansa canceled 20,000 flights scheduled for the coming months. What does this mean for affected passengers?
In the European Union, passenger rights are regulated by the Air Passenger Rights Regulation
In the EU the framework is clear. Air passenger rights regulation sets out what airline customers can expect. “In case of cancellation, passengers are generally entitled to compensation of between €250 and €600, depending on the distance of the flight,” says the Saxony Consumer Advice Centre. In addition, passengers are entitled to meals, hotel accommodation and alternative transportation.
This regulation applies to all flights departing from an airport within the European Union, regardless of where the operating airline is based. For flights from a non-EU country to the EU, this only applies if they are operated by an airline based in the EU.
However, if the airline informs passengers of the cancellation at least two weeks before departure, there is no compensation. “Currently, we are expecting airlines to cancel flights with sufficient notice to avoid having to compensate passengers,” says Andre Duderstedt, an advisor in the mobility and resource protection team at the German Consumer Advice Centre. This way, airlines will also avoid the question of whether the expected jet fuel shortage is an “extraordinary circumstance.”
Is the jet fuel shortage an “extraordinary circumstance”?
In “exceptional circumstances”, airlines are exempted from the obligation to provide compensation as defined in the EU Air Passenger Rights Regulation. Air traffic controller strikes or natural disasters “create extraordinary circumstances, but whether a potential jet fuel shortage will hold up in court remains to be seen. “It all depends on whether the airline has done everything within its power to operate the flight as scheduled,” explains Kamila Kaempfert, head of the consumer advice center in Görlitz, Saxony. Whether compensation will actually be awarded depends on the specific case. Therefore, travelers should review their cancellation notices carefully.
The situation regarding flight passenger rights varies significantly outside the European Union – for example, in the United States, where there is no standard framework regarding how customers are compensated for canceled flights. The US Department of Transportation says, “Each airline has its own rules for compensation in cases of delay or cancellation.” It is entirely up to the discretion of the airlines whether they cover meals and accommodation during long waits or not. In case of canceled flights, passengers are entitled to a refund of the ticket price only.
America is less affected by jet fuel shortage
On the other hand, the jet fuel shortage is likely to affect the US much less than other regions of the world, because its dependence on imports is much lower. According to the European Federation for Transport and Environment, supplies typically routed through the Strait of Hormuz account for about 30% of kerosene demand in the EU. Therefore, it is not surprising that since the beginning of the war the average fuel cost per passenger has increased to €29 on intra-European flights and to €88 on intercontinental flights. This is clearly reflected in higher ticket prices.