Air Canada has cancelled flights from June 1 (Image: Getty)
A major airline is suspending all flights to New York’s JFK International Airport this summer due to the war in Iran creating jet fuel shortages. Canada’s flag carrier, Air Canada, said on Friday that flights from Toronto and Montreal to JFK will cease from June 1 and won’t be resumed until October 25.
Services to the New York metropolitan area’s two other airports — LaGuardia and Newark — will continue. Air Canada said it will reach out to customers who are affected by the suspension with alternative travel options.
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A spokesperson for the Montreal airline said: “As jet fuel prices have doubled since the start of the Iran conflict and some lower profitability routes and flights are no longer economic, we are making schedule adjustments accordingly.”
The average price for a gallon of jet fuel reached 4.32 dollars (£3.19) on Thursday, up from 2.50 dollars (£1.84) the day before the war in Iran broke out, according to Argus Media.
Oil prices dropped more than 10% on Friday after Iran said the Strait of Hormuz is open again for commercial tankers carrying oil from the Persian Gulf to customers worldwide.
Fuel and labour costs are typically the largest annual expenses for airlines.
Delta Air said this month that the tab for higher fuel would add 2 billion dollars to its second-quarter costs. Airlines including JetBlue and United Airlines are raising bag fees to offset skyrocketing fuel costs while others scale back services.
In an exclusive Associated Press interview on Thursday, International Energy Agency director Fatih Birol said Europe has “maybe six weeks” of remaining jet fuel supplies and said the global economy faces its “largest energy crisis”.
Derren Nathan, head of equity research at Hargreaves Lansdown, said: “Brent Crude prices have climbed five per cent to over $95 per barrel just days after they fell by about $12 to $85 on Friday on hopes of the resumption of energy cargoes through the Strait of Hormuz.
“Further downstream, the crisis is starting to have tangible effects, with several airlines cutting back on less profitable routes and the International Energy Agency warning that European jet fuel supplies could run out by early June.
“Over time, the energy supply chain is likely to pivot and become less dependent on the Strait, but so far, only around 20 per cent of oil traffic has been diverted, and there is no instant fix.
“There are some big names in Aviation reporting this week, and some cautious guidance is to be expected.
“US carriers United and American Airlines report on Wednesday and Thursday, respectively.
“The effect of short-term oil price fluctuations is likely to be less pronounced higher up the chain, but a prolonged hit to airline profitability could, in time, feed through to demand for aircraft and engines from the likes of Boeing and GE Aerospace, who are also set to report this week.
