FrankfurtJet fuel costs doubled, Lufthansa CEO Spohr said.
The Hormuz siege tightened European jet fuel supply; airlines hedge quarterly, not annually, so a months-long closure now shows in the schedule.
Lufthansa has 3 asks of the EU Commission: Jet A imports, slot-rule suspension, and anti-tankering exemptions.
Sources: Bloomberg Business, Investing.com India
WHY JET FUEL IS DIFFERENT
Jet A is kerosene with tight specs — flash point, freeze point, sulfur content. Refiners cannot simply pivot a diesel unit to make more of it. The crack spread between crude and jet widens fastest in a crisis because substitution is slow.
THE HORMUZ EXPOSURE
Roughly a fifth of global oil and a quarter of refined products pass through Hormuz. Gulf refineries — Ruwais, Ras Tanura, Jebel Ali — are major jet fuel exporters to Europe and Asia. A sustained closure removes supply faster than Atlantic basin refiners can replace it.
HOW AIRLINES HEDGE
Most European carriers hedge 40-60% of fuel exposure rolling 6-12 months out. Lufthansa runs shorter — typically 1-2 quarters — which keeps margins close to spot when prices fall but exposes the airline when a shock outlasts the hedge book. Ryanair, by contrast, has hedged up to 90% two years forward and rides through spikes the network carriers cannot.
TANKERING — AND WHY IT'S BANNED
Tankering means loading extra fuel at a cheap airport to avoid buying expensive fuel at the destination. The extra weight burns more fuel in flight, raising emissions. The EU restricted the practice in 2022 on climate grounds. Lufthansa is now asking for an exemption — a tacit admission the climate framework was built for normal markets.
THE SLOT REGIME
EU airport slots follow 'use it or lose it' — carriers must operate 80% of allocated slots or forfeit them to competitors. The rule was suspended during COVID. Lufthansa wants the same suspension now, because canceling Asia routes to ration fuel would otherwise hand prized Frankfurt slots to rivals.
THE 1990 PRECEDENT
During the Gulf War buildup, jet fuel spiked 130% in four months. Pan Am, already weak, could not pass the cost through and entered Chapter 11 the following year. The lesson European carriers absorbed: fuel shocks do not kill airlines on impact — they kill the ones already running thin balance sheets when the shock arrives.