SCOTT DETROW, HOST:
The war in Iran has caused the biggest disruption to oil supplies in history, and that, in turn, has set the price of jet fuel soaring with major consequences for the aviation industry. This week, one of Europe's biggest airlines canceled tens of thousands of flights, and one U.S. airline may stop flying altogether. NPR transportation correspondent Joel Rose joins us now with more. Hi, Joel.
JOEL ROSE, BYLINE: Hey, Scott.
DETROW: Let's just start with the price of jet fuel. Why is it up so much?
ROSE: Well, that starts with the Strait of Hormuz. That is the narrow waterway on Iran's coast that connects the Persian Gulf and the Gulf of Oman. The strait has been largely closed since the beginning of the war. Normally, it is a major shipping channel for oil and jet fuel coming out of the Persian Gulf, and that supply is especially crucial for countries in Asia and Europe. Europe imports about a third of its jet fuel, and a significant chunk of those imports normally come from the Middle East. With that supply disrupted, European airlines are looking at a huge spike in the cost of jet fuel. Prices have roughly doubled there since the war began.
DETROW: So let's start with Europe. What are airlines there doing about it?
ROSE: This week, one of the continent's biggest airlines took a dramatic step. The German carrier Lufthansa announced it will cut 20,000 flights from its schedule through the fall in order to save on jet fuel. And a couple of other major airlines - KLM and Scandinavian airlines - have also trimmed their schedules, although those cuts are much smaller than what Lufthansa announced this week.
I talked about this with Rico Luman. He's an economist at ING Research based in Amsterdam. Luman says he was surprised by the size of the cuts at Lufthansa.
RICO LUMAN: I expect there's more to come, actually, when we will be remain stuck in this conflict and face high fuel prices like this. We will see more coming out of other airlines.
ROSE: Lufthansa is cutting mainly short-haul flights in Europe. These are high-frequency routes, so Luman says passengers should be able to rebook, but travelers and tourists in Europe will likely have fewer options during the height of their summer travel season in July and August.
DETROW: And you mentioned through the fall. These are long-term decisions being made right now.
ROSE: That's right.
DETROW: What about in the U.S., though? Have we seen a big impact on the aviation industry here?
ROSE: So one U.S. airline in particular has gotten a lot of attention this week. That is Spirit Airlines. And I should say the problems at Spirit are not new. The company has been struggling for a long time. It filed for bankruptcy last year for the second time since 2024. But the soaring price of jet fuel is really forcing the issue and calling into question whether Spirit can stay in business. This week, the White House got involved. President Trump confirmed yesterday that the administration is considering a bailout and potentially taking a big stake in Spirit.
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PRESIDENT DONALD TRUMP: I think we just buy it. We'd be getting it virtually debt-free. They have some good aircrafts. They have good assets. And when the price of oil goes down, we'll sell it for a profit. I'd love to be able to save those jobs. I'd love to be able to save an airline. I - you know, we - I like having a lot of airlines, so it's competitive.
ROSE: You know, the federal government has intervened before to help the airline industry as a whole, but that's different from stepping in to rescue a single airline. This idea has gotten a lot of pushback, including from prominent Republicans in the Senate. And there appears to be some disagreement even within the Trump administration. Transportation Secretary Sean Duffy sounded skeptical in media interviews this week. Duffy told Reuters that buying spirit might be a case of putting good money after bad.
DETROW: What are other U.S. airlines doing?
ROSE: The U.S. is the world's largest oil producer, and it's a net exporter of jet fuel. So the fuel situation here is different from Europe, but the prices are up here, too, about 70% higher than before the war began. U.S. airlines are mostly passing that cost on to travelers in the form of higher bag fees and higher fares. We are not seeing the big flight cuts like the European carriers are announcing, at least not yet.
DETROW: That is NPR transportation correspondent Joel Rose. Thank you so much.
ROSE: You're welcome. Transcript provided by NPR, Copyright NPR.
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