Airlines are using “fuel shortage” myth to cancel unprofitable routes: private jet CEO

With jet fuel prices soaring to more than double their pre-conflict levels since the outbreak of the Iran war, the CEO of a private jet company is pushing back on growing speculation within the industry, insisting there is no actual shortage of jet fuel.

In a recent interview with Fortune, Greg Raiff, CEO of Elevate Jet, said he has not seen any actual supply shortage in the market.

News headlines tell one story: the closure of the Strait of Hormuz has cut off more than 20 per cent of the world’s jet fuel supply. Major airlines have cancelled hundreds of flights worldwide, while Europe could see fuel reserves fall to a critical 23-day threshold by June.

But a shortage of jet fuel? Raiff isn’t seeing it.

“Those stories are largely politically driven by governmental authorities who are trying to pressure an end to the war, and no better way to get people out than tell them that they can’t get to their summer holiday,” he told Fortune.

“Not only has demand not slowed for private aviation, since fuel prices went up and the war started, it’s actually gone up slightly,” he said. “Aviation is up this year in terms of total demand, total hours flown, total volume of arrivals and departures, on a global basis.”

Raiff argues that airlines are using the crisis as cover to trim less profitable routes as higher fuel prices squeeze margins.

The more serious risk?

It’s one reason why commercial airlines are cancelling thousands of seats, he told the outlet.

Airlines are required to operate a minimum number of flights on certain routes in order to retain their airport landing and takeoff slots (a routine obligation under normal market conditions).

But with jet fuel prices now more than double their pre-war levels, many of those routes have suddenly become economically unsustainable.

At the same time, demand has collapsed on routes to destinations such as Dubai and Riyadh, where safety concerns have made airlines and passengers increasingly reluctant to fly.

In the interview, Raiff believes the more serious risk would come later this year, in the fall, if the conflict drags into the fall, when refineries may face competing demand between jet fuel and heating oil production.

“If we still have this issue going in the fall, call it October, I think we’ll begin to have a competition between heating our homes or flying our planes,” he said.

Airlines slim down

The commentary comes as airlines around the world – including Canadian carriers – trim their 2026 schedules.

As reported, Air Canada recently scaled back service on several international and U.S. routes.

“Jet fuel prices have doubled since the start of the Iran conflict, affecting some lower profitability routes and flights which now are no longer economically feasible. Schedule adjustments including some frequency reductions are being made in response,” the airline writes in a message posted to its website.

WestJet has also said it plans to cut capacity to offset rising fuel expenses. The airline expects to reduce flights by roughly three per cent in May and close to six per cent in June, while continuing to review its summer schedule for possible additional cancellations.

Some of the latest cutbacks include the airline’s Moncton to Calgary flights.

Additionally, WestJet’s planned Toronto-Medellin service for 2026, which was initially scheduled from April 28 to October 24, 2026, has been shortened to the period of June 25 to September 5.

Air Transat, too, has reduced planned capacity by six per cent from May to October, with the extended suspension of its Cuba service through October accounting for most of that reduction.

Don't miss a single travel story: subscribe to PAX today!  Click here to follow PAX on Facebook.