* European airline CEOs meet in Brussels
* Airline chiefs urge rollback of synthetic jet fuel
mandate
* War, oil prices buffeting aviation sector
(Updates with CEO comments throughout)
By Joanna Plucinska and Tim Hepher
BRUSSELS, March 19 (Reuters) - European airline chiefs
called for the postponement of "broken" parts of the EU's green
agenda on Thursday, warning of higher fares in the event of
prolonged conflict in the Middle East.
Citing a lack of available supply and prohibitively high
costs, the industry's A4E lobbying group urged regulators to
roll back mandates for the use of synthetic sustainable jet fuel
(eSAF) starting in 2030, confirming a Reuters report.
"We are calling for the eSAF mandate to be postponed until
eSAF is actually available," easyJet CEO Kenton Jarvis
told a news conference.
Air France-KLM, Ryanair and other major
carriers have for years lamented the green fuel mandate as
imposing an unequal burden on Europe's airlines, allowing Asian
and Middle Eastern carriers a cost advantage.
The green jet fuel industry and environmental groups insist
the shift is necessary to reduce the sector's reliance on oil.
"It would endanger our future energy security just for the
sake of short-term quarterly results," said Matteo Mirolo,
special advisor to the CEO, Arcadia eFuels.
MIDDLE EAST WAR RIPPLES THROUGH SECTOR
The Middle East conflict, now well into its third week, has
thrown aviation into turmoil, with flights cancelled or rerouted
thousands of miles and most airspace over the Gulf still closed
amid fears of missile and drone attacks.
Jet fuel prices have spiked, pushing up operating costs,
with European prices doubling and Asian prices up almost 80%
since U.S. and Israeli strikes on Iran began in late February.
While most European airlines are cushioned by fuel hedging
contracts, those are set to run out in the coming months, with
CEOs warning at the annual summit in Brussels that Europe won't
be immune to higher ticket prices tied to more expensive oil.
Jarvis said consumers should book their flights early to
avoid a rise in prices.
Air France-KLM and SAS have already said they will have to
hike ticket prices due to the rising cost of jet fuel, while
Finnair has warned that jet fuel supplies may run out due to the
effective closure of the Strait of Hormuz.
WINNERS AND LOSERS?
U.S. airlines such as Delta this week warned of
higher ticket prices tied to fuel costs since many American
carriers have not hedged their fuel costs. Spring travel demand,
however, remains strong.
Ryanair CEO Michael O'Leary said European tourists are
likely to travel closer to home to cut flight times and avoid
flying long-haul over the Middle East.
CEOs said it was too early to tell how the aviation
ecosystem will be reshaped by the war in the longer term.
British Airways is adding more flights to destinations like
the Caribbean that avoid flying over Middle Eastern airspace,
while Lufthansa CEO Carsten Spohr told reporters the carrier is
set to launch a new route to Malaysian capital Kuala Lumpur as
it expands flights to Southeast Asia.