Flight cancellations and surging jet fuel prices resulting from the conflict in Iran are dampening air traffic supply in Germany. According to data from the industry association BDL, seat capacity from June to November is stagnating at nearly 142m, remaining level with the same period last year. While low-cost carriers and tourism-focused airlines are bringing 3 percent more tickets to market, the offering from major network airlines such as Lufthansa or Emirates is shrinking by 2 to 3 percent. "The reason for this is the burden placed on the industry by high kerosene prices," the BDL explained on Wednesday.

With the onset of the Iran conflict in late February, a large portion of flights to the Middle East conflict region were cancelled and had not fully recovered by June. At times, jet fuel was twice as expensive as it was before the war. Airlines reduced their capacities to the affected destination areas by 5 percent from June to November, as stated by the BDL. However, routes to Western Europe, which are vital for Germany as a business location, are also set to shrink by 5 percent over the next six months. This likely reflects flight cancellations by Lufthansa. Due to increased fuel costs and the abrupt termination of operations at its feeder airline Cityline, the carrier removed 20,000 flights from its summer schedule. Further cancellations are expected as short-haul offerings at the group's six European hubs are consolidated.

According to BDL data, European network airlines, led by market leader Lufthansa Group in Germany, are offering 3 percent fewer tickets through November. Compared to the pre-pandemic year of 2019, available capacity stands at 81 percent: elsewhere in Europe, airline groups such as Lufthansa, Air France-KLM, the British-Spanish conglomerate IAG, and other network carriers have reached a recovery rate of 97 percent.

This first stagnation in German air traffic since the recovery from the coronavirus pandemic began three years ago is widening the gap with other European nations. The industry primarily blames significantly higher domestic costs driven by taxes and fees, which will only see a marginal decrease starting in July. Germany has long lagged behind its European neighbors in terms of growth. The fuel price shock appears not to have hit other European markets as severely: flight offerings in Europe, excluding Germany, are growing by 6 percent to reach 116 percent of 2019 levels.

Major German commercial airports are feeling the impact of airline capacity cuts. At the two primary hubs, Frankfurt and Munich, offered capacity is no longer growing, the BDL stated. This could render the forecast from Frankfurt airport operator Fraport obsolete, which had anticipated growth of approximately 4 percent to reach up to 66m passengers.

(Report by Ilona Wissenbach, edited by Ralf Banser. For inquiries, please contact the editorial management at frankfurt.newsroom@thomsonreuters.com)