Key insights
- The EU will not offer emergency aid to airlines due to the Iran war's limited impact on tourism. Existing passenger rights remain, and high fuel prices don't waive airport slot rules. Airlines are exploring Jet A fuel usage to ensure supply. This suggests a slightly negative impact on airline profitability due to potentially higher fuel costs, but no systemic risk to US equities.
Investing.com -- The European Union plans to inform airlines that the impact of the Iran war on tourism does not warrant emergency measures for the sector, according to draft EU guidelines seen by Reuters.
"The current situation does not point to the need for dedicated measures for the tourism sector, unlike during the COVID-19 crisis," the draft guidelines stated. The European Commission is scheduled to publish the guidance on Friday.
The draft document reported no jet fuel shortages in the EU. Under existing EU law, passengers retain the right to reimbursement, re-routing or return if their flights are cancelled.
A local fuel shortage could exempt airlines from paying compensation for cancelled flights, the guidance noted. However, flight cancellations due to high fuel prices do not qualify for this exemption.
The draft also clarified that high jet fuel prices do not constitute a serious disturbance of operations that would waive airport slot rules.
The industry is evaluating the feasibility of using Jet A grade fuel at locations that typically use Jet A-1 to ensure supply, according to the guidance. Airlines can already use either Jet A or Jet A-1 fuel grades, as there is no law against using Jet A, the document confirmed.
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