Javier Gándara is easyJet CEO for Spain and Portugal and president of the Spanish Airline Association.
In Mallorca for the reopening of the easyJet base in Palma, Gándara gave an assessment of the current fuel supply situation. "What the producers and airports are telling us is that there won't be any supply problems for the next three or four weeks. Beyond that, it's difficult to see. In Spain, we are in a comparatively better situation than neighbouring countries for two reasons. Firstly, because of all the crude oil that is imported and then refined here, only 11% comes from the Middle East, which is the percentage affected by the closure of the Strait of Hormuz; the remaining 89% comes from elsewhere.
"But everything is affected because, ultimately, we are talking about a global market, even if not directly. Between 80% and 85% of the aviation kerosene consumed in Spain is refined here. So, we are in a comparatively better situation than other countries in our region, although if there are problems in other countries, that ends up affecting flights to Spain.
"No one will be immune to potential supply problems. Ships that leave and pass through the Strait of Hormuz and come to Europe take an average of 45 days, and they have already been practically out of service for two months. It will take time to recover all of that. It's difficult to know what will happen, so we'll react as we go."
Questions have been asked as to why some airlines are already raising prices if fuel is purchased months in advance. Gándara explains: "It's not exactly like that. What we do is use forward contracts that guarantee a specific price. These contracts protect you against price increases. In easyJet's case, we have 70% of our estimated kerosene consumption already secured for the next six months at a price similar to what it was before the conflict, around $700 per metric tonne. Now it's more than double. This protects us from volatility. But that has nothing to do with supply; in other words, the only thing we're guaranteeing is a specific price."
In terms of the tourism season, there has been talk of a diversion of holidaymakers from the Middle East and the eastern Mediterranean. But there have also been concerns about cancellations because of increased prices.
Gándara says: "Making predictions is always difficult, but in the current environment, it's more so than ever. It's true that there will likely be a diversion of tourists who no longer wish to go to the areas directly affected by the conflict, nor to neighbouring countries like Egypt or Turkey. But this is a global crisis. All consumers will experience a significant impact on their income due to the increase in mortgage and rental prices, food, gasoline, and so on. What will be the net effect of both? It's difficult to predict.
"One thing we're seeing - and the same thing happened with the Arab Spring in 2016 - is that in a situation like this, people wait a bit before booking. In general, they're booking with less advance notice than before precisely to see how the situation develops. In a normal year, at this point (mid-April) we usually have a very good idea of how things are going to go, but now the uncertainty makes it very difficult to predict.
"It's still early, but we feel that any adjustments to schedules which may have to be made in the case of the Balearics, and Mallorca in particular, will be due less to capacity adjustments than to occupancy adjustments. When you have 35 routes like the ones we have to Palma and three different aircraft models with varying capacities, that's an advantage. You can adapt by flying planes a little fuller or a little less full."