Lufthansa Cargo is insured against a possible kerosene shortage due to the situation in the Strait of Hormuz. However, Frank Bauer, Chief Operating Officer and member of the Management Board of Lufthansa Cargo AG, admitted a localized jet fuel shortage in Asia of 10-20%.
„When it comes to fuel supplies to our European air hubs, we are insured. Even if the Strait of Hormuz remains closed for a prolonged period until mid-June, there is no risk of a fuel shortage. Long-term forecasts are extremely difficult at this point, as it is currently difficult to get a clear picture of the global situation“, Bauer said in an interview with Die Welt.
At the same time, he acknowledged that supply shortages could indeed occur in some places, especially in Asia. "From today's perspective, however, we are not talking about large-scale reductions. In individual countries or regions, I would expect volumes to decrease by 10 to 20 percent. At the same time, we are confident that suppliers will fully fulfill our contracts and our long-term supply agreements will have a stabilizing effect," Bauer said.
In mid-April, the head of the International Energy Agency, Fatih Birol, warned in an interview with the Associated Press that Europe could run out of jet fuel within about six weeks.
Bauer said that the ban on European airlines using Russian airspace is costing the airline 100 million euros in operating profit annually.
“The ban on flights over Russia puts us at a significant competitive disadvantage, for example, compared to our Chinese competitors. On the Shanghai-Frankfurt route, the diversion has increased the flight time by an hour and a half, which leads to a corresponding increase in kerosene consumption. The increased fuel weight reduces our payload and therefore our revenue“, Bauer said in an interview with Die Welt.
He explained that because the planes are on the route for longer periods, the airline can ultimately operate fewer flights per week. “All this costs us approximately 100 million euros in operating profit per year“, he said.
At the end of February 2022, the European Union completely closed its skies to all Russian aircraft. The ban applies to all aircraft owned, registered or controlled by Russian citizens and companies (including private business jets). In response, on February 28, 2022, Rosaviatsia banned flights over Russian territory for airlines from 36 countries, including all EU member states, the United Kingdom, Canada, and other regions that supported the sanctions.