Holidaymakers choose train, staycations amid airlines’ jet fuel crisis

Europe’s jet fuel crisis is threatening peak travel season, but consumers are instead looking to holiday closer to home to save money and avoid flight disruptions.

European airlines have taken a hit since the U.S.-Iran war began, as they battle surging fuel costs as well as a jet fuel shortage while the Strait of Hormuz remains blocked. The region typically imports 75% of its jet fuel from the Middle East.

Jet fuel prices increased 103% by the end of March compared to the month prior, according to the International Air Transport Association.

The International Energy Agency chief, Fatih Birol, warned in April that Europe was just weeks away from running out of jet fuel if it was unable to secure alternative export sources.

As fuel costs form around 20 to 40% of an airline’s operating costs, many are now offloading those costs by increasing surcharges and canceling unprofitable routes. German carrier Lufthansa, Scandinavian airline SAS, and Dutch-French airline Air France-KLM are among those cutting flights.

British holidaymakers are now looking at destinations closer to home in Southern Europe, including France, Spain, and Greece, and considering alternative travel options, including rail, as the Iran war raises the stakes of taking long-haul flights.

“I think the trend you will see this summer in Europe is people will start to holiday at home,” Ryanair‘s CEO Michael O’ Leary told CNBC’s Ben Boulos at the Norges Bank Investment Management Conference in Oslo in April.

 “I think people will increasingly decide, let’s book Portugal, Spain, Italy, and let’s avoid the Middle East or going long haul… we’re seeing people switch away from going to the Middle East or going long haul, towards going short haul,” O’Leary added.