Lufthansa Group said Thursday it will cancel 20,000 short-haul flights through October and retire 27 regional jets from its CityLine subsidiary ahead of schedule, the largest concrete capacity cut yet tied to the jet-fuel shortage spreading from the Strait of Hormuz. The German carrier said the cuts will conserve roughly 40,000 tonnes of jet fuel and concentrate flying on its Frankfurt and Munich hubs.

The move turns an abstract energy shock into schedule pages. Jet-fuel prices have more than doubled in some markets since the late-February U.S.-Israeli war on Iran began, climbing from about $99 a barrel at month-end to as high as $209 in early April. Europe, which draws roughly 75 percent of its jet fuel from the Middle East, is the most exposed region, and its largest airline group is now rationing capacity to match the supply it can secure.

What Lufthansa said

Lufthansa said it has adequate jet fuel "for the coming weeks" and is "pursuing a range of measures" to maintain stable supplies through summer, including "physical procurement of jet fuel." The airline did not quantify how much additional fuel it has locked up or at what price. The CityLine fleet retirements pull forward decisions Lufthansa had previously signaled for later in the decade.

The International Energy Agency's head warned this month that Europe has "maybe six weeks or so of jet fuel left," a line Lufthansa's schedule appears to take at face value. EU Energy Commissioner Dan Jorgensen has pegged the broader cost of the conflict at about 500 million euros a day for the bloc, adding that "even in a best-case scenario, it's still bad."

The supply side

Traffic through the Strait of Hormuz has virtually halted. Karen Young, a senior fellow at the Middle East Institute, said roughly 600 million barrels of oil have failed to reach their destinations since late February, calling the disruption "the largest supply shock to energy markets that we have ever experienced." Under normal conditions about 20 million barrels of crude and 4 million to 5 million barrels of refined products, including jet fuel and diesel, move through the strait daily, alongside roughly 20 percent of the world's petrochemical supply.

Recovery will not be quick. Kuwait Petroleum Corporation estimates that restarting wells alone could take three to four months once the strait reopens, before loading facilities, stored volumes and shipping lanes are reset.

The Spirit test

The fuel shock is also squeezing the weakest U.S. carrier. Spirit Airlines has filed for bankruptcy protection twice since late 2024, saw its JetBlue merger blocked by a judge in 2024, and is now trying to emerge from Chapter 11 by summer with fuel costs running at multi-year highs. Transportation Secretary Sean Duffy said he is "taking a look" at the airline at President Trump's request.

Mike Boyd, chief executive of Boyd Group International, said Spirit faces liquidation. "They'll have to shrink to survive. And no airline can shrink to survive," Boyd said. He added that Spirit "won't be missed," pointing to the carrier's 3.4 percent domestic market share from February 2025 through January 2026, against 16 percent to 18 percent each for Delta, American, Southwest and United. The exception is Fort Lauderdale, where Spirit held roughly 27 percent of the market in January. Spirit said "operations continue as normal."

Counterpoint

Not every analyst agrees Spirit's exit would be a non-event. Jan Brueckner, a retired economics professor at the University of California, Irvine, said the ultra-low-cost carrier disciplines pricing across the industry and that without it, "basic economy fares could start to creep back up." The disagreement between Boyd and Brueckner sets the terms of any Washington rescue debate: whether Spirit is a marginal operator the market can absorb or a price anchor whose loss flows straight to consumers.

Lufthansa's cancellations run through October. The IEA's six-week clock on European jet fuel runs out earlier.