Swiss Air Secures Six Weeks of Jet Fuel, Prepares Contingency Plans Amid Shortage Fears
By Olivia Le Poidevin
Swiss International Air Lines' Response to Jet Fuel Shortage Concerns
GENEVA, May 10 (Reuters) - Swiss International Air Lines has sufficient jet fuel supplies for the next six weeks, its CEO told the NZZ newspaper on Saturday, but is exploring contingencies like "tankering" amid industry warnings of fuel shortages tied to the Iran war.
Current Jet Fuel Supply Status
SWISS CEO Jens Fehlinger told the newspaper Neue Zürcher Zeitung that "the forecasts from our suppliers - oil companies and refineries - are currently good."
Industry Warnings and Regional Risks
European airlines have warned of potential jet fuel shortages within weeks as a result of the U.S.-Iran conflict--which has curtailed supply and sent energy prices surging--and could disrupt the summer travel season.
"If there were to be a shortage of kerosene, it would first be seen in Africa or Asia. We have no signs of that at the moment," he told NZZ.
Contingency Planning and Alternative Strategies
Tankering and Regulatory Considerations
While the outlook remains stable, Fehlinger said the airline and parent company, Lufthansa Group, were working on contingency plans including “tankering,” where aircraft would fill up fully at a destination where there is ample supply, in order to bring additional fuel back to Zurich.
Such practices are currently restricted by regulations but Fehlinger indicated there could be discussions with policymakers to reopen the possibility.
Strategic Refueling Stops
Another option is strategic refueling stops at well-supplied airports along flight routes, such as in Vienna for flights to Asia, he said.
Financial Impact and Hedging Measures
Potential Fare Increases
Fehlinger told NZZ persistently high oil prices would likely feed through to fares over time.
Hedging and Cost Management
Extent of Hedging
SWISS had insulated itself from recent volatility in fuel markets by hedging about 80% of its kerosene requirements for the year, limiting the immediate impact of rising prices.
Current Cost Increases
The airline has experienced only a 20% increase in fuel-related costs so far, he said.
(Reporting by Olivia Le PoidevinEditing by Bernadette Baum)