EasyJet boss issues fuel shortage update

EasyJet has issued an update for customers regarding fuel supply amid the soaring prices. Fuel prices have skyrocketed since the war in the Middle East broke out on February 28. The rise in costs has significantly affected the aviation industry; prices have gone from approximately $85 to $90 per barrel to as high as $150 to $200 per barrel in recent weeks. As a result, airlines are having to pass the increase on through higher fares or cutting flights.

Amid the chaos, Javier Gándara, easyJet's CEO for Spain and Portugal and president of the Spanish Airline Association, claims there will be no supply issues in the near future, and that Spain is in a much better situation than neighbouring countries.

He explained that according to producers and airports, there will not be any supply problems for the next three or four weeks.

The CEO added: "Beyond that, it's difficult to see. In Spain, we are in a comparatively better situation than neighbouring countries for two reasons. Firstly, because of all the crude oil that is imported and then refined here, only 11% comes from the Middle East, which is the percentage affected by the closure of the Strait of Hormuz; the remaining 89% comes from elsewhere

"But everything is affected because, ultimately, we are talking about a global market, even if not directly. Between 80% and 85% of the aviation kerosene consumed in Spain is refined here. So, we are in a comparatively better situation than other countries in our region, although if there are problems in other countries, that ends up affecting flights to Spain.

"No one will be immune to potential supply problems. Ships that leave and pass through the Strait of Hormuz and come to Europe take an average of 45 days, and they have already been practically out of service for two months. It will take time to recover all of that. It's difficult to know what will happen, so we'll react as we go.

Mr Gándara also explained why other airlines seem to be increasing their prices, as fuel is purchased months in advance, reports Majorca Daily Bulletin.

He noted that easyJet uses forward contracts that guarantee a specific price, thereby protecting passengers from price increases. The airline has already secured a significant portion of its estimated kerosene (jet fuel) consumption for the next six months at a price similar to that before the conflict.

He said: "This protects us from volatility. But that has nothing to do with supply; in other words, the only thing we're guaranteeing is a specific price."