AirAsia CEO: Hormuz crisis hit airlines harder than COVID

The shutdown of the Strait of Hormuz has dealt a more severe blow to the global airline industry than the 2020 pandemic, according to Tony Fernandes, CEO of AirAsia. In an interview with the Financial Times, Fernandes revealed that jet fuel prices have more than tripled since the Middle East conflict escalated and the critical waterway was closed.

“This is worse than COVID,” Fernandes said. The strait’s closure disrupted oil shipments, sending crude prices from $85 a barrel to over $200 by late February. Airlines worldwide are now scrambling. Many have raised ticket prices and cut flights. Some have simply shut down.

Spirit Airlines, for instance, canceled all its flights and ceased operations after failing to secure emergency aid from the White House. In Europe, the International Energy Agency’s head, Fatih Birol, warned in April of looming shortages of diesel and jet kerosene. Willie Walsh, director general of the International Air Transport Association, predicted that by late May, European carriers may start canceling flights due to fuel shortages—a scenario already playing out in parts of Asia.

For an industry still recovering from the pandemic, the Hormuz crisis has become an unexpected and brutal test of survival.