EU: Iran crisis does not yet warrant emergency measures for tourism sector

BRUSSELS- The EU is set to tell airlines the impact from the Iran war on tourism is not severe enough to warrant emergency measures like waiving their obligations to compensate passengers for flight cancellations, draft EU guidelines seen by Reuters showed.

European airlines have largely ridden out the crisis so far, with hedges cushioning costs even as jet fuel prices have risen nearly 84% since the U.S.-Israeli war with Iran began on February 28. Carriers have warned, however, that supply shortages could emerge within weeks.

"The current situation does not point to the need for dedicated measures for the tourism sector, unlike during the COVID-19 crisis," the draft EU guidelines for industry and passengers said.

"At this stage, available data indicate that overall impacts on tourism remain limited, with demand remaining broadly resilient," it added.

High fuel prices do not count as an extraordinary circumstance that would allow airlines to avoid compensating passengers for cancelled flights, the guidelines said. Local fuel shortages could justify this, it added.

No jet fuel shortages have been reported in the European Union. Europe relies on imports for about 75% of its jet fuel, mainly from the Middle East, more than for any other transport fuel.

The EU will also reiterate that under existing laws airlines can use Jet A grade fuel - which is mainly used in the U.S. - in place of the Jet A-1 grade widely used in Europe, if it helps replace Middle Eastern supplies.

Jet A-1 fuel is preferred in Europe because it has a lower freezing point than Jet A, although both grades are certified for commercial use.

A European Commission spokesperson declined to comment on the document, which could still change before publication on Friday.

-Kate Abnett. Editing by Toby Chopra and Mark Potter/Reuters