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Anyone reading headlines about air traffic at the moment might think that the next major flight cancellation is already on the horizon in Europe. This sounds dramatic and makes for good headlines - but it is still not an accurate description of the situation. The truth is that the war with Iran has put the market for aviation fuel in Europe under considerable pressure. Reuters reported back in March that jet fuel had risen from around 85 to 90 dollars per barrel to 150 to 200 dollars in a short space of time. EUROCONTROL confirmed at the end of March that average jet fuel prices in Europe were therefore around twice as high as at the beginning of the year.
This means that the cost pressure is real. However, the commodities market does not automatically turn into a supply catastrophe at every airport overnight. This is exactly where the usual crisis noise often begins: a serious market problem quickly turns into an end-time film with a boarding pass. For a sober categorisation, it is therefore worth taking a look at the actual mechanisms.
The critical point lies in the supply chain. The Strait of Hormuz is central to energy exports from the Gulf. If pressure increases there, this will affect the European market for aviation fuel. The EU is therefore now considering making member states more responsible for holding and monitoring jet fuel stocks in a more targeted manner and redistributing them regionally in the event of a shortage. Closer market monitoring and a fuel observatory are also planned. This shows how seriously Brussels is taking the situation. However, it also shows that the reaction so far has been primarily precautionary, not an expression of a collapse that has already occurred.
EUROCONTROL reported an average jet fuel price of 4.73 dollars per gallon for 27 March and 4.85 dollars per gallon for 10 April. Prices therefore remain high and volatile, but are moving in a market that is continuously monitored and not flying blind.
So far, the situation in Spain has been more stable than in other parts of Europe. According to ALA, around 80 to 85 per cent of the jet fuel consumed in Spain is produced domestically. El País also reports that Aena has significantly tightened its monitoring of the situation and is working more closely with Cores, Exolum, airlines and industry associations. At the same time, the key message from Spain remains remarkably sober: operations are running normally and there is currently no sign of an acute supply problem at Spanish airports.
This is the crucial point for Alicante and Valencia. Both airports depend on the Spanish system, not on an isolated special situation. So anyone who suggests that the Iran conflict is having a direct impact on flights to the Costa Blanca as a supply shortage is currently telling a more dramatic than realistic story. The problem lies first and foremost in the costs and the uncertainty of the market, not in empty tanks on the Mediterranean coast.
Of course, the conflict is not without consequences. Airlines have long been feeling the effects of higher fuel costs. Reuters reported back in March that several airlines were reacting to the price pressure. SAS and Air New Zealand raised fares, while other providers introduced surcharges or adjusted their planning. On 22 April, United then openly declared that ticket prices could rise by 15 to 20 per cent in order to compensate for the higher fuel costs; at the same time, the company had already implemented several price increases.
For passengers on routes to Alicante or Valencia, this means above all that the likelihood of tickets being more expensive at certain points increases. Particularly susceptible are travel times in high demand, bookings at short notice and connections with less competition. On the other hand, an across-the-board and immediate price jump on all European routes to Spain is less likely. The market is too differentiated for this and Spain's supply situation has so far been too stable.
When it comes to air fares in particular, everything is currently being summarised in a simple formula: War equals paraffin shortage equals ticket shock. It makes for a catchy read, but often only partially stands up to closer scrutiny. Yes, the price of aviation fuel has risen massively. Yes, airlines are already reacting. Yes, the EU is preparing for possible bottlenecks. No, this has not yet automatically led to an immediate supply crisis in Spain or a widespread price hike on every connection to Alicante and Valencia.
In other words, the issue is serious enough without having to write the next catastrophe report. The market is under pressure. But nothing more so far.
Whether flights to the Costa Blanca and the Valencia region will become noticeably more expensive depends on three main factors: the duration of the conflict, the further development of jet fuel prices and how much of the additional costs the airlines actually pass on to customers. As long as Spain maintains its comparatively stable supply and competition on European routes continues, there is currently more in favour of selective surcharges than a general price shock.
The Iran conflict has brought Europe's air traffic into a delicate phase when it comes to fuel. Paraffin prices have risen sharply, airlines are already reacting and the EU is considering additional security mechanisms. For Spain, however, the motto at the moment is: vigilant yes, supply crisis no. Anyone looking at flights to Alicante or Valencia should therefore expect a nervous market rather than the major collapse that some headlines are already trying to conjure up.
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