"No Fuel Left" - Could Global Aviation Soon Come to a Standstill?

[SPEAKER_00]: I'm Dan and I'm Alex and welcome back to on air another jam packed episode ahead as we take you through what is happening all over the world as different markets fill the impacts of the US and Israel's ongoing war on Iran and this is now filtering to even the most remote areas of the earth in what is shaping up to be the biggest crisis in global aviation.

[SPEAKER_00]: in recent history, the developments and the impacts continue to reveal themselves an hour by hour as this situation continues and I think with that Dan we should probably start on fuel but let me first check in with you and ask how you are. [SPEAKER_00]: Oh good, I'll get a how are you?

[SPEAKER_00]: Not too bad. [SPEAKER_00]: It's been extremely busy as you can imagine. [SPEAKER_00]: And also I think what has been the key difference between last week during our episode and this week is I think people are more aware than ever. [SPEAKER_00]: of how this, you know, perhaps they heard something was happening in the Middle East, how this is now touching their everyday lives, uh, be it in the price of, uh, things in the supermarket, uh, to the, of course, when they're refueling at the pump, but we are going to look at how, uh, [SPEAKER_00]: airlines are in panic mode right now all over the world because of the way in which this has impacted the economy and continues to do so in a really, really destructive form.

[SPEAKER_00]: Shall we start with the jet fuel situation? [SPEAKER_01]: Yeah, let's talk about what you really helped highlight for the entire world via [SPEAKER_00]: Yesterday, and the day previously, I've been broadcasting and then shared some of this on social media, which recently has been difficult to try to keep up with.

[SPEAKER_00]: And I say that because it's when, you know, with so many things that you're working on during the working day, sometimes that the, to then take that little tidbit or that bit of information and put it on social media. [SPEAKER_00]: can't can fool her on the list, understandably so. [SPEAKER_00]: But what I am often reminded of it is it is worth doing because when you do, it suddenly goes everywhere.

[SPEAKER_00]: And that's because not only is the algorithm driving that that people want to know and are discovering the true global impact of what is playing out right now and where the US administration may continue to be hinting about weeks and weeks more of this perhaps even months. [SPEAKER_00]: None of this is sustainable for aviation going forward, and I say that because jet fuel prices now have risen in some markets by over a hundred percent and that's just in the space of a few weeks Jet fuel prices in Europe for example are up over a hundred percent and in multiple different markets around the world they have at least doubled [SPEAKER_00]: Now, the reason why this is incredibly significant of course is because not only has the price of jet fuel surged, but also we are now witnessing a jet fuel shortage that hasn't occurred in recent aviation history.

[SPEAKER_00]: In many markets, we are less than a week away from [SPEAKER_00]: are running on empty because there is not enough fuel in the system to be able to distribute and move around the earth because of the hold up in the straight of hormones because of the conflict and the ongoing US Israel war on Iran that has triggered this massive global reaction.

[SPEAKER_00]: from an economic point of view, but also in terms of its impact on the supply chain. [SPEAKER_00]: Now, I want to be clear, while I just sighted Europe there as having the jet full price rise by over 100% in just a matter of weeks, this is not only a European problem, this is affecting across the constant of Asia, South America, Africa, airlines are working on plans, and I'll take you through some of those plans, because we see a [SPEAKER_00]: real reality of if nothing changes and what we're looking at now continues for the next few weeks.

[SPEAKER_00]: We are going to have major airline hubs declare themselves as out of fuel, bringing commercial aviation and cargo to a halt as this US is a war on Iran continues to unfold and drives the economy into destruction mode. [SPEAKER_01]: it's concerning and at the same time it's good to see the airlines that are being proactive about trying to slim down their operations, which is of course really unfortunate that they have to do because that means prices are going up.

[SPEAKER_01]: Availability is going down, but just in Asia here I think it's interesting error routes.com a site we love to use to track. [SPEAKER_01]: airline schedules reports that Botic Air in Malaysia is cutting its schedule by 36 percent in April. [SPEAKER_01]: That's in Malaysia very far from the Middle East, right?

[SPEAKER_01]: We have Vietnam jet air cutting its schedule by 27 percent in April. [SPEAKER_01]: So this is just a small sample of many airlines from all around the world who are having to look at. [SPEAKER_01]: These are the flights we were going to operate, but now we can't afford to operate any flights that are not completely full and completely necessary.

[SPEAKER_00]: Absolutely, and this is the picture. [SPEAKER_00]: It is a truly global picture. [SPEAKER_00]: The jet fuel price surge, this is separate, of course, to bring crude oil and it has surge way beyond that, because the production of jet fuel is a more refined process. [SPEAKER_00]: They're additional layers to that, and that's why it's more complicated to produce.

[SPEAKER_00]: Before the crisis, it was a $87 US dollar's barrel. [SPEAKER_00]: It's now at $200 US dollars a barrel. [SPEAKER_00]: And as a result, of course, fairs are soaring because the passenger will be the individual that this cost this increase overhead is ultimately passed on to. [SPEAKER_00]: We've seen airlines [SPEAKER_00]: most of the major carriers, I mean collectively, if you put them as a group 53 billion has been wiped out in terms of their market cap losses.

[SPEAKER_00]: It's been an incredibly costly few weeks, but it is only worsening and that is the picture as to where we are now. [SPEAKER_00]: The USL lines are particularly exposed as well because many of them abandoned fuel hedging quite a while ago, [SPEAKER_00]: And then as we look at the other the other carriers around the world, as you say, we saw some hints from the likes of the Asian carriers like Korean air just a few weeks ago, who were in discussions to raise their fairs because of the the surging chat fuel price.

[SPEAKER_00]: Vietnam Airlines, we touched on last week, canceling many domestic flights, Scandinavian in where you're neck of the woods, canceling over a thousand flights across Scandinavia because of the jet fuel price. [SPEAKER_00]: And with that now, we have the additional crisis of the jet fuel shortage.

[SPEAKER_00]: And as I say, I have been briefed on many European airline hubs that are actively working on [SPEAKER_00]: some form of communication to airlines that explains that there is no option to refuel at their hubs and what that will mean for airline operators to those hubs. [SPEAKER_00]: Now let's first talk about what what happens if this were if this were a smaller crisis and it perhaps would affect a short whole market somebody tweeted me saying well what about fuel tankering?

[SPEAKER_00]: Haven't you heard a [SPEAKER_00]: no, actually. [SPEAKER_00]: Okay, so a few tankering is the practice of if I am a British hours and I'm based at Heathrow Terminal 5 and I know that where I am flying to the price of jet fuel is higher there for whatever reason, the economy there, the market, and perhaps some instability, all those things that determine and drive the fuel price, what I'll do and or at least what it was easier to do prior to some some some policy on this, which has limited it in recent years.

[SPEAKER_00]: is I would fill up entirely at home. [SPEAKER_00]: So I would insure there is enough fuel on board for, for example, the flight back as well so that I'm not refueling in that market and exposing the airline into higher fuel costs and increasing the overhead. [SPEAKER_00]: Similarly, it works the other way.

[SPEAKER_00]: Flying to destinations whereby the price of fuel would be lower than I would go on the minimum and the safe minimum. [SPEAKER_00]: and then when I reach that destination where the price of jet fuel is less than my home market I'm going to fill up all the way and that way I've been able to secure jet fuel from a petrol station in inverted commas.

[SPEAKER_00]: There's offering me a lower price and the airline of course benefits from reduced overhead there and the aircraft is is nicely full of fuel perhaps for multiple sectors on the rest of that day so that's a few tankering. [SPEAKER_00]: Fuel tankering is not possible in this scenario because [SPEAKER_00]: How are you fuel tankering when there is a global shortage now?

[SPEAKER_00]: How are you fuel tankering when the price of jet fuel has surged globally in every market? [SPEAKER_00]: And that's why we're now seeing airlines enter crisis mode. [SPEAKER_00]: And this is going to be a real defining moment for our travel as it touches every corner here. [SPEAKER_00]: I'll take you through down some of the statements from different stakeholders that I was reaching out to [SPEAKER_00]: insulated and safely away from everything, right?

[SPEAKER_00]: Sydney airport, quote, no assurances that we will receive jet fuel over the coming weeks could quite literally cut Australia off. [SPEAKER_00]: Many EU and UK hubs that I spoke to are weeks away from declaring a jet fuel shortage emergency as the tanks potentially run [SPEAKER_00]: already at airlines across Europe including Scandinavian islands that preparing for a fresh new wave.

[SPEAKER_00]: Air France have said that their Asia routes are now quote the highest risk, highest risk because of the impact and the risk of not being able to refuel adequately there. [SPEAKER_00]: The price, if they're able to do so, but now that additional layer of the fact that Holdon, there isn't enough fuel for our France to be able to refuel in the Southeast Asian markets, these are markets that have switched to work from home.

[SPEAKER_00]: These are markets that have closed hospitality, that are telling people not to come into the office, because they can't turn on the air conditioning because of the energy crisis that continues to unfold. [SPEAKER_00]: And this is what aviation is finding itself called up in at the moment.

[SPEAKER_01]: Yeah, and by the way, we have an interesting thing to think about is the US has not been mentioned that much so far in this discussion. [SPEAKER_01]: They're supposed to host the World Cup in just a few months, right? [SPEAKER_01]: Where the whole world is supposed to be flying to the US and contributing billions to the US economy in the area.

[SPEAKER_01]: It's actually in a matter of weeks in the grand scheme of things. [SPEAKER_00]: It's in weeks. [SPEAKER_01]: Yeah, and how's that good? [SPEAKER_01]: What's the plan? [SPEAKER_01]: What's the plan, guys? [SPEAKER_00]: Seriously, well, I think what what has been revealed over the last month is that there is no plan.

[SPEAKER_00]: Yeah, there is absolutely no plan because this is not just affecting those markets that I've just said. [SPEAKER_00]: With that, actually, let's look at the US. [SPEAKER_00]: Let's see what's happening across the United States to see if it's impacting them because [SPEAKER_00]: you might hear from the current administration in the U.S. that well, they don't even take that feel from the Middle East.

[SPEAKER_00]: So who cares if they've had this massive escalation that has led to the closure of the Strait of Hormuz? [SPEAKER_00]: Who cares if they have let Israel continue to be destructive in various different ways. [SPEAKER_00]: And then, [SPEAKER_00]: the U.S. kind of comes in after and says we didn't know they were going to do that.

[SPEAKER_00]: And therefore the economy continues to suffer as well, of course, the cost of human lives. [SPEAKER_00]: Let's talk about the U.S. [SPEAKER_00]: So what's happening there? [SPEAKER_00]: The U.S. jet fuel index is up 72 percent. [SPEAKER_00]: Jet fuel that does not originate from the Middle East up 72 percent massively outpacing, [SPEAKER_00]: Brent Crude oil price.

[SPEAKER_00]: Fairs on US roots, key roots such as New York to Los Angeles have more than doubled. [SPEAKER_00]: US airlines do not hedge and as a result are incredibly exposed to this American airlines particularly vulnerable, no hedging, very thin margins, incredibly fair sensitive and a leisure heavy passenger base who are now wondering, is this the right time to book [SPEAKER_00]: Well, we have the answer.

[SPEAKER_00]: New York London fairs are up 177%. [SPEAKER_00]: We can't week continuing to surge. [SPEAKER_00]: United have said that that jet fuel price has more than doubled in the last three weeks. [SPEAKER_00]: And if it were to continue with the current state of play, their annual fuel bill will exceed 11 billion US dollars [SPEAKER_00]: United projecting that their annual fuel bill would be more than double its best ever annual profit.

[SPEAKER_00]: None of this is sustainable. [SPEAKER_00]: This is hurting the U.S. and the U.S. consumer as airlines now struggle to overcome this crisis. [SPEAKER_00]: Delta already admitting they have taken [SPEAKER_00]: a 400 million US dollar hit due to the rising fuel price and now fearful like everyone else of the global fuel shortage and while they may think they have enough to be able to fill up in Atlanta.

[SPEAKER_00]: The same cannot be said when they land anywhere else in the world, Europe, Africa, Asia, and so on. [SPEAKER_01]: Precisely, in which country in the world has the most domestic travelers and which country is aviation the most important tool for getting around in the US? [SPEAKER_01]: Dalton United are really the two only airlines in the U.S. on a semi solid financial foundation American the third big U.S. carrier has been on slightly shaky ground the past, you know, at least since COVID, [SPEAKER_01]: We have a lot of airlines that are extremely vulnerable to this and it leaves a country like the US that is so dependent on air travel and aviation extremely vulnerable as a whole.

[SPEAKER_01]: And one thing I have to give Delta credit for and that I really appreciate on a separate topic to the fuel prices is that the US has had a separate aviation crisis ongoing, which is the [SPEAKER_01]: have not been paid due to the partial government shutdown of the non-funding of the DHS.

[SPEAKER_01]: So Trump sent an ice to airports, and Delta said, you know what? [SPEAKER_01]: Until this, until you restore payment to TSA officers to get our operations up and running, so that Americans don't have to stand in line for three, four, five hours at the TSA, [SPEAKER_01]: We're not gonna honor our additional benefits that we give Congress members.

[SPEAKER_01]: So for context, anyone who's in Congress gets priority check in, priority security and all types of other benefits when flying with Delta. [SPEAKER_01]: They decided to put those on hold until something was done, which I think is a very bold, decisive move from an airline that is ultimately like all airlines in the US, very vulnerable to, [SPEAKER_01]: Um, you know, the personal opinion of certain politicians toward them in order to get what they want.

[SPEAKER_01]: So credit were credited as due to a delta for using some of their power to say, no, that's enough. [SPEAKER_00]: Absolutely. [SPEAKER_00]: And what I find staggering is that am I correct, is that Congress is currently on holiday? [SPEAKER_00]: Yeah. [SPEAKER_00]: It's great right now. [SPEAKER_00]: The Senate is closed.

[SPEAKER_00]: Lindsey Graham, the war hungry senator is in Disneyland. [SPEAKER_00]: Yeah, I mean, nothing surprises us any more, right? [SPEAKER_00]: And I'm with that. [SPEAKER_00]: I'm happy to see Alan's coming forward taking the right decision because again, this none of this is sustainable for them.

[SPEAKER_00]: I'm going to read you this quote from the Italian Defense Minister on the consequences. [SPEAKER_00]: He said this a day before yesterday. [SPEAKER_00]: He said, quote, I'm forced to know things about what could happen in the coming week and the effects that it will have on the economy and everyday lives.

[SPEAKER_00]: and knowing this no longer allows me to sleep, and, and, and, and again, this is not hyperbolic, this is not exaggeration. [SPEAKER_00]: This, this morning, we have the news, South Korea's aviation sector, officially now in crisis mode, Korea, where you and I were a year ago this week, at the Korean [SPEAKER_00]: luxury five star Korean air Korean air the country's largest carrier has officially joined aziana and t-way air two other Korean carriers into clearing quote emergency management mode effective first of April.

[SPEAKER_00]: The airline is ultimately, and officially, in a crisis setup, structurally, what does that mean? [SPEAKER_00]: It means that that priorities pivot away from their ordinary operations into the senior management entering and triggering that crisis response to a crisis that Korean air now consider themselves to be very much in.

[SPEAKER_00]: They're citing a severe jet fuel shortage. [SPEAKER_00]: and a massive price spike in jet fuel, which is what I have just taken us through earlier in the episode. [SPEAKER_00]: It is touching everywhere. [SPEAKER_00]: Let's move to the UK. [SPEAKER_00]: The UK, the last known shipment of jet fuel to the UK from the Middle East is arriving this week.

[SPEAKER_00]: That is the last known shipment that airlines, the shipment is on a Libyan flagged vessel. [SPEAKER_00]: It's due to arriving [SPEAKER_00]: no other UK-bound vessels from the region are visible or heading to the UK and just a reminder the UK's source at least half of its jet fuel from the Middle East in recent months.

[SPEAKER_00]: Obviously especially difficult because of the way they had to turn away from Russian supplies following the invasion of Ukraine a few years ago. [SPEAKER_00]: There are worries across the UK, of course, about the everyday person filling up that cast. [SPEAKER_00]: But now, in terms of the jet fuel shortage and the situation that airlines are being briefed on, I spoke with two airline leaders who have told me that they are working on contingency plans to figure out and determine where, across the global network is in a little safer of a position in terms of being able to refuel and adding that destination as a technical stop [SPEAKER_00]: on route to their long-haul markets, if they are going to be able to continue to fly long haul.

[SPEAKER_00]: The second airline CEO said to me, quote, none of this is sustainable, not any of it. [SPEAKER_00]: This has to end and quote, this is not a scenario that airlines actively planned for at this scale and also the [SPEAKER_00]: the way that this has presented itself so suddenly and I think as I say the difference between just last week and this week is staggering because last week you may have been considering this to be a problem in the Middle East and this week you are now realizing that even if you are in far-flung Alaska, your airline, your local airline is struggling to figure out how to refuel and that extends across the board in other areas of life we know but from an aviation

[SPEAKER_01]: It's such a wild time in the world, of course, but in this industry too, because at the same time, we have United announcing all these new premium products and premium initiatives, which would be really exciting in normal times to talk about and seeing how United is being one of the most innovative airlines in the world at the moment, in some ways, [SPEAKER_01]: But right now, it just seems like really bad timing to be launching a bunch of new premium products when there's, you know, a cost of living crisis that is getting worse by the minute AVA airline prices and all cabins are skyrocketing, so, yeah, strange.

[SPEAKER_00]: it's uh it's it and you know this is triggering a response of course everywhere the UK Prime Minister is having to meet with fuel bosses because there are those those fears of a very real shortage and not just not on the way it's here now. [SPEAKER_00]: And there is one European line hub that has already put out a communication to our operators just to ensure that they are arriving within a few.

[SPEAKER_00]: Now, that's easiest to then done because if you are a long operator and you're arriving to, for example, Munich, because of payload, because of the ultimate weight of the aircraft operating the outbound flight, you can't simply on a long-haul flight also. [SPEAKER_00]: feel at home with enough fuel to be able to get you back home after it's not possible.

[SPEAKER_00]: If you were if you were going to do that, you would need to remove all the passengers upstairs and potentially half the car go as well, which is why it's not, it's not doable. [SPEAKER_00]: The interesting part I feel is that this really [SPEAKER_00]: has been noticed by those who fly domestically in the US as you said, the biggest market domestic to an extent.

[SPEAKER_00]: And also those that are starting to forward plan summer. [SPEAKER_00]: And we are now on that week where it ticks over to the summer schedule in the IR to calendar for airlines. [SPEAKER_00]: of the Northern Hemisphere and also we know that this period is where people typically start to think about their plans for perhaps when the school's break up and if that's in June or July depending on where you live and so on and what that looks like for their travel plans, now consumer fears are growing and they are also surging, surging in line with the jetfield price, right?

[SPEAKER_00]: And that itself becomes an additional layer to the crisis because as we see confidence fall, it translates to fewer forward bookings which makes our lines even more nervous because they're thinking about how, if they're unable to get that cash in for the forward bookings, they are in a worse position to try to navigate the current challenge and this current part of the crisis.

[SPEAKER_01]: Yeah, just anecdotally I can share that, you know, as someone who now runs a travel agency helping you guys and my YouTube yours book, luxury hotels everywhere in the world, we're seeing people cancel their stays in the summer in every corner of the world. [SPEAKER_01]: So not just in the Middle East of course, but people are canceling all over Asia and Australia and Africa.

[SPEAKER_01]: Because of the uncertainty and people don't know if they want to suddenly spend all this money. [SPEAKER_01]: So yeah, the global impacts on tourism, on aviation are, of course, huge. [SPEAKER_00]: And the interesting part is that did you see, so we've had those airlines that are trying to be a bit more agile and say that perhaps they might be in a better place.

[SPEAKER_00]: in terms of the way that they've been able to hedge, which hedging, of course, protects those airlines from the fluctuating fuel price because hedging involves them locking in a pre-planned, if you like, to put it in simple terms, price from previous, those airlines are also not necessarily in a better position because of the way that they, [SPEAKER_00]: are suffering to obtain the supply.

[SPEAKER_00]: So while they may be locked in at a reduced price compared with those that are now exposed to the market highs of today, if capacity of fuel is not there and there is this fuel shortage extending across so many different markets, then that itself puts them in the same boat as everyone else.

[SPEAKER_00]: It's look, we're over 30 days since those initial strikes on Iran by Israel. [SPEAKER_00]: There is no clear ceasefire. [SPEAKER_00]: Trump has paused a deadline to work, but he's also been threatening to strike various different bits of critical infrastructure, including that of key to civilian life and that's being called out.

[SPEAKER_00]: And it's very unclear as to whether or not this is progressing, worsening, if this is stagnation, if it but one thing is for sure is that from an aviation point of view, this is a problem that [SPEAKER_00]: and this is really the definition of a perfect storm. [SPEAKER_00]: Yes, they're going to be raising fairs, which you, the fair paying passenger will fill over the coming months that that's a given.

[SPEAKER_00]: But at the moment, there is that pressing issue as to if they can't get these aircraft off of the ground then we're in another COVID and social media is full of rhetoric about if we are actually what why does this feel like February 2020 and so many different in so many different ways let's move to Brussels and Europe where inevitably because of the global economic crisis the European Commission.

[SPEAKER_00]: is saying that Europeans should seriously consider traveling less because there is simply not enough energy to go around. [SPEAKER_00]: In a letter, the request was made by the EU Energy Chief. [SPEAKER_00]: He reflected that the fears are that the conflict right now is spiraling in a way that is touching all areas of the earth with serious implications for the global economy.

[SPEAKER_00]: And [SPEAKER_00]: encouraging that there must be demand saving measures with particular attention on the transport sector, meaning asking citizens to fly less or to stop flying all together in order to save fuel for more essential purposes such as keeping critical infrastructure like hospitals open and key services for populations across Europe again.

[SPEAKER_00]: with all this being now our reality? [SPEAKER_00]: Surely we are going to see some kind of coordinated effort from all the other world leaders. [SPEAKER_00]: You would think they would be getting together to realise there is currently [SPEAKER_00]: only one man that can stop this because he's the one man that started it all.

[SPEAKER_01]: Yeah, and besides this is all, it's not like COVID where we don't have a choice. [SPEAKER_01]: It's one man who can say, okay, we're stopping this and then the world can start trying to go back to normal. [SPEAKER_01]: So it's such a bizarre situation that the whole world is [SPEAKER_01]: Contorted and being, you know, their arm is being twisted because of a situation that no one else really wants or has anything to do with.

[SPEAKER_00]: Yeah, yeah, it's the right. [SPEAKER_00]: We have quite a few questions. [SPEAKER_00]: In fact, a lot. [SPEAKER_00]: A ton. [SPEAKER_00]: Let's dedicate the rest of the episode to getting to these Q&A. [SPEAKER_00]: Sounds good. [SPEAKER_00]: Let's do it. [SPEAKER_01]: Adam says, hi, Dan and Alex, love the podcast and listen every week, just a little observation on my own Emirates route, Glasgow to Dubai usually operated by an A380.

[SPEAKER_01]: This route was very popular and was prior to COVID and again since 2023, I guess an A380. [SPEAKER_01]: Local press, even hinted of a second frequency coming back. [SPEAKER_01]: However, twice a month, the route has [SPEAKER_01]: Twice in a month, the route has been downsized, which is a very sad sign of the times.

[SPEAKER_01]: First, to a triple 7, and as I write this in a 350, my question is, do you think we can see route cancellations come from this emergency? [SPEAKER_01]: I also keep seeing Emirates trying to get up to 100 percent capacity, but two downsides of aircraft does concern me a little for my local route.

[SPEAKER_01]: Thanks guys and keep up the podcast. [SPEAKER_01]: So, we are seeing a lot of airlines cancel routes. [SPEAKER_01]: I think the, for now, it's unclear obviously when we talk about the Middle Eastern Airlines, what lies ahead for them, especially. [SPEAKER_01]: But, for example, I in May was booked to fly Virgin Atlantic from London to Riyadh.

[SPEAKER_01]: I got an email a couple days ago, not only saying my flight has been cancelled, but the whole route has been cancelled for a good. [SPEAKER_01]: the email was not we regret to inform you your flight has been canceled it was we it's been a pleasure serving our passengers in re-ad but unfortunately we've decided to lay this route off i'm like this is you know such a if it was true if we were not in the middle if we were not in the middle of such a big crisis would we not be adding this [SPEAKER_00]: don't we have a fire somewhere of that virgin atlantic rhetoric of what they launching and we need to didn't we joke we we we we like when virgin announced a route launch but we wish they would also tell us when there would be cancelling that route because that's the pattern right so if you say launching first of April it being cancelled xyz so I'll give them the benefit of the doubt because of the nature of the global crisis however it doesn't go well for the the rhetoric we were building

[SPEAKER_01]: That is actually so true, but the, of course, the, the interesting thing here is one thing we have mentioned is Saudi has been the number one in country in the world investing in tourism. [SPEAKER_01]: So the impact of this on that goal and that investment. [SPEAKER_01]: And the amount they fought have airlines launch flights to Riyadh.

[SPEAKER_01]: We had Delta who is the most conservative airline who hates flying long, ultra long hole. [SPEAKER_01]: And now it's flights to Riyadh. [SPEAKER_01]: We see those launch. [SPEAKER_01]: And now Virgin pulling out, you know, and of course, there are roots all over the world. [SPEAKER_01]: That, you know, temporarily did a fuel shortage.

[SPEAKER_01]: will have to be cut, but then long term, this is a reason for airlines to reevaluate their entire networks and see, okay, what do we need to operate these routes? [SPEAKER_01]: Can we be more agile because the same thing happened after COVID, airlines were able to reopen with their key routes and now they're it's another chance, which in a way I guess is good for airlines to look critically at where they fly [SPEAKER_00]: Definitely the I've got a question here from Rob in Melbourne.

[SPEAKER_00]: He says the Philippines has declared a national energy emergency How close are we to actual groundings? [SPEAKER_00]: Well, this is this is very valid. [SPEAKER_00]: I mean, we I think everything that I've kind of presented so far on today's episode Demonstrates that that is the that is the direction we're moving towards right now the airlines are struggling to obtain fuel because of the global shortage The price of fuel if you can get hold of it is extreme an airlines [SPEAKER_00]: simply don't have the reserves to be able to pay those prices for anything longer than a couple of days.

[SPEAKER_00]: And so with that, we are in a very real scenario whereby as routes are continuing to be cut and the networks slashed because of the way that there is no end in sight. [SPEAKER_00]: That all equates into groundings, and we're seeing groundings at some carriers who are quietly keeping aircraft on the ground, not being too public about it, but gently keeping them out of service because they realise that they only need 80 or 70% of their current fleet to fly a reduced operation.

[SPEAKER_00]: And of course, I'm not talking about the Middle East carriers who are of course [SPEAKER_00]: worst affected because of the S-based closures continuing in the Gulf and the way that they are right in the thick of it But I'm talking about the other reliance dotted elsewhere that have realized that they're not going to be flying To xy or z any time soon plus they can't get hold of jet fuel plus if they can it's so expensive e-calls Grountings of aircraft so yeah, I'd say we're already there [SPEAKER_01]: Yeah, we have a question here from Alex, another Alex.

[SPEAKER_01]: He's been listening to the podcast for over a year, has listened to every episode, that's all some things, Alex. [SPEAKER_01]: Amazing. [SPEAKER_01]: He wanted to ask about traveling from Europe to Asia. [SPEAKER_01]: He says, well, we'd be affected by the situation in the Middle East, we're flying on April 2nd, Dublin, Frankfurt to Almaty on Lufthansa, and back on the 26th of April Beijing to Dublin by a Frankfurt on Air China.

[SPEAKER_01]: Should we be concerned about this trip, or are we safe? [SPEAKER_01]: My perspective is, this is a pre-box flight, you're, you know, way from the region. [SPEAKER_01]: So from a safety perspective, you're fine. [SPEAKER_01]: The one question is fuel. [SPEAKER_01]: As we've been talking about this whole episode, but I would personally not worry too much about that specific trip.

[SPEAKER_00]: What do you think? [SPEAKER_00]: It's difficult. [SPEAKER_00]: I mean, the airlines are going to have to make decisions to trim and, and kind of [SPEAKER_00]: to ensure that they're able to deliver what they are contractually obligated to do and with that decisions are being made. [SPEAKER_00]: And so, [SPEAKER_00]: People have been in touch with me, friends have been in touch with me concerned about their flights to China, for example, to the Caribbean and wondering what the situation is like in each of these markets, because if you look at China, for example, where they were the, perhaps the largest customer of Qatar energy, the Qatar pumping out LNG, of course, as it's a primary export and China locked in.

[SPEAKER_00]: and taking so much of its energy from one source. [SPEAKER_00]: Now having to look at alternative sources because Katarina G has declared that it's unable to fulfill those contracts given that they have been so directly hit, and there is damage to their plants and to the Katarina G sites.

[SPEAKER_00]: How does that then filter out across the timeline and across the supply chain into everyday constellations and does it and the answer is that it does and that's why I think we do have to be prepared especially when flying long haul for short constellations as airlines flight by flight determined if they have enough if they have everything to be able to cover that flight and and also additionally I'll add quickly [SPEAKER_00]: No airline is going to send an aircraft to a destination where it's particularly uncertain if they're going to be able to refueled come back and that's what they would rather cancel from home and that's what people have to have in their heads as they are.

[SPEAKER_01]: Yeah, and keep in mind that this is of course an extraordinary circumstance. [SPEAKER_01]: So if you live in the EU or UK, this is not a situation where you'll be able to get compensation [SPEAKER_01]: However, this could be a great time if you haven't already to take out travel insurance because that should be quite helpful if something happens in your situation.

[SPEAKER_01]: Here we have a question from Rob, who says, hi, Daniel Alex, love the board, excellent content. [SPEAKER_01]: As always, looking for some advice, I have the around-the-world ticket with Singapore Airlines starting in Melbourne to JFK via Singapore. [SPEAKER_01]: I'm fortunate to be in business class all the way, however, what do you recommend on sleeping for this epic 33-hour combat?

[SPEAKER_01]: Okay, I thought this was going to be about the crisis. [SPEAKER_00]: It's okay, we'll quickly do it. [SPEAKER_00]: We'll quickly do it. [SPEAKER_01]: So he's saying that he's just straight away to the arrival time. [SPEAKER_01]: Yeah, he says he leaves a midnight from Melbourne, which is tough, and then he lands a JFK at 12 in the afternoon.

[SPEAKER_01]: So, you know, I guess, are philosophy for the first half and say, wait for the second half. [SPEAKER_01]: Yeah, like sleep from Melbourne to Singapore at least, and then on the second flight, try to sleep a bit more after take off. [SPEAKER_01]: It's, I mean, at this point, I just have started believing sleep as much as you can, whatever you can.

[SPEAKER_00]: I know. [SPEAKER_00]: In the crisis, we're like, you know what, if you can sleep, just close your eyes, don't worry about it. [SPEAKER_00]: Just to put it, bank every extra minute you can get right now. [SPEAKER_01]: Yeah, and let and remember, you're on the world's most expensive to operate flight right now, being the world's most expensive.

[SPEAKER_00]: Yes, yes, and Singapore Airlines, Singapore itself, struggling with fuel price, by the way, and also a very real fuel shortage. [SPEAKER_00]: So we'll keep an eye there. [SPEAKER_00]: A mere is asking, [SPEAKER_00]: The IEA is talking about reserve releases and remote work directives, which are already in place as so many different countries which you guys touched on in last week's episode.

[SPEAKER_00]: Are we actually in a 1970s style energy crisis that we're watching this now play out with the 2026 star aviation landscape? [SPEAKER_00]: I mean I think that's exactly what we're seeing. [SPEAKER_00]: We're seeing the impact that has been felt in previous decades historically, but we're seeing that play out [SPEAKER_00]: with our globalised interconnected air travel driven world.

[SPEAKER_00]: And that's why the impacts are extending everywhere from low costs to legacy, to long-haul operators, domestic carriers, and so on. [SPEAKER_00]: We aviation. [SPEAKER_00]: as I have repeatedly stated on this podcast, is so inherently exposed to just about everything. [SPEAKER_00]: You can imagine the severity of the current crisis because of the way that it is layer upon layer, upon layer of different complexities with very few solutions because of the way this situation is impacting every single market.

[SPEAKER_00]: With that, Ben asked, if Southeast Asian airports are starting to run dry, do airlines or airlines, I think he means a able to tank a fuel from Europe or just cancel the route. [SPEAKER_00]: We did touch on this earlier in the episode. [SPEAKER_00]: If you were to fly long haul from Singapore to London and you were able to secure fuel, let's say, in that scenario, from Singapore, it doesn't mean that you can have and you can fill up the airplane to ensure that there is enough fuel for the way back.

[SPEAKER_00]: If you were going to be able to do that, even though physically impossible to entirely refuel it, if you were going to be able to do that, you would have to ensure there were no passengers or cargo in order to reduce the payload. [SPEAKER_00]: Otherwise, it would be too heavy and exceed something known as maximum takeoff [SPEAKER_00]: basically in simple terms, the aircraft won't be able to get off the ground.

[SPEAKER_00]: So this is why even if it's not a problem for an airline in the home market, if it's a problem in the airline's destination market, it's suddenly now a problem for the airline in the home market too. [SPEAKER_01]: I'm the person. [SPEAKER_01]: Here we have final question for today from Gabriel.

[SPEAKER_01]: He says with travel getting harder across most of the world I just wanted to I want it. [SPEAKER_01]: I thought you might want to hear a little bit of a bright side for Canadian travelers So let's let's end on a positive [SPEAKER_01]: The world's newest U.S. pre-clearance facility opened up earlier this month at Y.T.

[SPEAKER_01]: Zed. [SPEAKER_01]: So that's Toronto's downtown airport, Billy Bishop Airport, which is made used by Dash 8 propeller aircraft. [SPEAKER_01]: Notably, it will include flights to LaGuardia, which does not have a CBB presence, so CBP. [SPEAKER_01]: So for basically, for now, you can fly from Billy Bishop Airport to Newark, but there haven't been pre-clearance flights to LaGuardia until now, which is great.

[SPEAKER_01]: As well as many other new flights with Air Canada, and ported to Boston, Chicago, and Washington. [SPEAKER_01]: There's, yeah, this, you know, I guess this is good news, but it comes at a very rocky time when Canadians Already don't want to travel to the US as much, but we are huge proponents of US pre-clearance because it's a way to, you know [SPEAKER_01]: not have any problems after flying into the U.S. As there, you know, we've heard a lot of horror stories about that since the late, ever, well since early 2025.

[SPEAKER_01]: Yeah. [SPEAKER_00]: Fun fact on Billy Bishop, uh, airport, one of the few airports in the world located on its own island. [SPEAKER_00]: Nice. [SPEAKER_00]: And yet it's still so close to downtown so you can just take a 90 second ferry or you can walk through a tunnel to reach downtown Toronto.

[SPEAKER_00]: a unique, a unique little apple that I'm definitely a fan of, named after one of Canadians most celebrated war heroes of veteran, but a good apple nonetheless. [SPEAKER_01]: It is, so on that note guys, stay safe, hope your travels go well, the coming week until we see you next Wednesday on air, bye-bye.

[SPEAKER_01]: See you soon guys.

"No Fuel Left" - Could Global Aviation Soon Come to a Standstill?

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