Airlines departing from the UK are poised to capitalise on a Brexit dividend that hands them greater flexibility to respond to potential jet fuel shortages in the wake of the Iran war.
European Union rules stipulate that at least 90 per cent of the total fuel needed for a flight must be sourced from the departure airport.
These laws are designed to combat “tankering”, where airlines fill up on extra fuel from airports in countries where it is significantly cheaper.
Many planes have the fuel capacity to fly well beyond their range. For instance, an Airbus A380 can fly up to 8,200 nautical miles, significantly more than the 6,000 nautical mile round trip between London and Dubai.
With fuel among an airline’s biggest cost, filling up in countries where the price is far lower can yield significant savings. However, tankering has environmental downsides, as carrying excess fuel increases weight and therefore fuel burn.
The Brussels laws are part of ReFuelEU, the Eurozone’s effort to encourage greater use of sustainable aviation fuel (SAF) and reduce emissions.
Crucially, however, the UK’s equivalent regime, the SAF Mandate, does not include similar “anti-tankering” provisions and was adopted following the country’s exit from the EU.
Typically, this would have little impact on the day-to-day fuelling patterns of airlines going in and out of the UK. However, in a crisis situation where there are jet fuel shortages, the policy differential could give UK-based airlines greater flexibility to manage any problems.
The UK government said that there was no disruption to the supply of jet fuel at British airports.
Last week, it emerged that European airports face “systemic” shortages of jet fuel in a matter of weeks. “If the passage through the Strait of Hormuz does not resume in any significant and stable way within the next three weeks, systemic jet fuel shortage is set to become a reality for the EU,” said Apostolos Tzitzikostas, the EU transport commissioner.
Countries in Asia have already commenced rationing jet fuel as a result of shortages relating to the conflict in Iran.
Senior fuel industry sources played down the prospect of a major crisis in the UK. In part, this is because distributors to major airports in the UK have received uninterrupted deliveries of jet fuel from the European maritime hub of Amsterdam, Rotterdam, and Antwerp, which in turn source crude globally.
One said that the UK supply of jet fuel was well stocked and there had been “no real dent to supply levels”.
Airlines industry figures, meanwhile, said the availability of jet fuel was dependent on the individual contracts with suppliers. Some carriers had more favourable terms than others, meaning they could ride out potential shortages more easily.
A government source said that jet fuel shipments were continuing to arrive in the UK, with imports from a range of countries. Officials are engaging with British carriers to support their operations against the backdrop of war in the Middle East, and to limit the impact on passengers.
Michael O’Leary, chief executive of Ryanair, last week warned that if the Iran war did not end “by the end of April”, he expects European airlines to start cutting scheduled flights.
Rival airline sources poured cold water on such claims, saying their contracts left them with sufficient fuel for much longer.
A Department for Transport spokeswoman said: “We’re backing UK aviation and homegrown sustainable aviation fuel [SAF] … to create highly skilled jobs, drive growth and reduce emissions.
“By boosting demand for SAF and powering up production by setting prices for the fuel, we’re giving industry the certainty it needs to transition to cleaner flying.”