Step on to the tarmac at any major airport around the world, and you'll notice an unmistakable smell.
asserted
you → step → smell
That pungent aroma has become a lot more expensive in recent weeks.
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aroma → become → weeks
The price of jet fuel has risen dramatically on international markets since the start of the conflict in the Middle East.
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price → rise → East
There are now concerns that unless the Strait of Hormuz reopens soon, there could be physical shortages in some areas in the coming months.
uncertain
Strait → be → months
Many airlines have already pushed up ticket prices as the cost of flying has increased, and some have trimmed their capacity.
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some → push → capacity
Unless extra supplies can be found, a lack of fuel could lead to further disruption and cancellations heading into the peak summer holiday period.
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lack → find → period
The crisis has exposed just how vulnerable the industry in the UK - Europe's biggest consumer of jet fuel - is to disruption in the Middle East.
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industry → expose → East
So what impact might that have on our summer holidays - and what could be done about it?
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what → have → it
A scramble for jet fuel
The Gulf region produces far more jet fuel than it requires for its own purposes.
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it → produce → purposes
As a result, under normal circumstances it is a major exporter, accounting for about 20% of the fuel traded on international markets each day.
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it → account → markets
Due to a lack of refining capacity, it is heavily reliant on imports, more than half of which typically come from the Gulf.
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half → come → Gulf
With the Strait of Hormuz having been blocked for the past eight weeks, however, those supplies have not been available, prompting a scramble for fuel produced elsewhere.
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supplies → block → fuel
This has pushed up prices dramatically.
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This → push → prices
In late February, before the first US and Israeli airstrikes, jet fuel was trading at $831 per tonne in Europe.
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fuel → trade → Europe
By early April, it had touched $1838 – an increase of more than 120%.
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it → touch → %
It has since retreated but has consistently remained above $1500.
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It → retreat → 1500
A lack of refining capacity
Jet fuel is essentially a highly refined form of kerosene with specialised additives, and is usually produced from fractional distillation of crude oil.
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fuel → produce → oil
Because supplies are dictated largely by the availability of refining capacity, the loss of output from the Gulf has led to jet fuel prices increasing far more than those for crude oil.
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prices → dictate → oil
"We have had five refinery closures in the last two-and a-bit years in Europe, whereas jet fuel demand has been rising year on year," explains Amaar Khan, head of jet fuel pricing at Argus Media.
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Khan → have → Media
"So, we see weaker supply, greater demand.
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we → see → supply
The UK is particularly dependent on imports, which make up 65% of what we need.
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we → make → what
Two of the refineries that closed were British, leaving just four in operation here.
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that → close → operation
Pared-back schedules and rising fares
For airlines, fuel is a major expense.
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fuel → par → airlines
It typically accounts for 25-30% of their operating costs, according to the International Air Transport Association (IATA).
uncertain
It → account → Association
As a result, if the price goes up, it can have a major impact on their profitability.
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it → go → profitability
In Europe and Asia, it is common for airlines to use hedging strategies to limit their exposure to rising prices, buying fuel or other oil products at a fixed or capped cost in advance.
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airlines → use → advance
However, this does not offer complete protection.
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this → offer → protection
EasyJet, for example, hedged 80% of its fuel supply for the first half of the year at $717/tonne - but finding the remainder at prevailing prices cost the airline an extra £25m in March alone.
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finding → hedge → March
Other carriers, notably US ones, have preferred not to hedge at all in recent years, because it can prove expensive when prices fall.
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prices → prefer → years
That has left them heavily exposed to the current crisis.
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That → leave → crisis
Some airlines - such as Air France KLM, Air Canada and SAS - have already responded by cutting their summer schedules.
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airlines → respond → schedules
The German group Lufthansa said earlier this month it would remove 20,000 flights between now and the end of October.
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it → say → October
"If a route was marginally profitable before this crisis came along, it is now firmly under water and losing money in a big way," says Jonathan Hinkles, a former chief executive of the regional carrier Loganair and current CEO of Skybus.
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Hinkles → come → Skybus
Fares have also been going up.
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Fares → go → ?
This has been most marked on long-haul routes – especially those normally served by the major Gulf carriers, where a steep reduction in capacity has combined with high fuel prices to make tickets a lot more expensive.
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tickets → mark → prices
A flight from London to Melbourne in June now costs 76% more than it did last year, for example, according to research from the consultancy Teneo.
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it → cost → Teneo
The US carrier United Airlines has been particularly bullish about making sure passengers bear the brunt of higher fuel costs, with its CEO Scott Kirby telling investors last month the company would do "whatever it takes to recover 100% of the increase in jet fuel prices as quickly as possible".
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it → make → prices
IAG, which owns British Airways as well as Iberia, Aer Lingus, Vueling and Level, has also warned that travellers will have to pay more, while Virgin Atlantic has already introduced surcharges ranging from £50 on a return economy class ticket to £360 for a business class fare.
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Atlantic → own → fare
In fact, according to Wizz Air's chief executive József Váradi, prices have been going down as airlines have sought to persuade potentially reluctant customers to travel.
uncertain
airlines → accord → customers
"Simply, people don't know what's going to happen… so there is a level of hesitancy," he told reporters in late April.
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he → know → April
…and 69 more, not listed.
