News / ‘Jet fuel will be the least of our worries’: Cargolux CEO on Hormuz crisis

Cargolux chief executive Richard Forson has warned that prolonged disruption in the Strait of Hormuz could trigger fuel shortages, inflation, and a wider global economic downturn, as the air cargo carrier continues to reroute flights from much of the Middle East. 

He told The Loadstar the consequences of the Iran conflict could extend far beyond aviation, and warned that jet fuel shortages would be “the least of our worries” if the crisis continued for several months.  

“It all depends how long the conflict actually lasts,” he explained. “As long as there is continued uncertainty as to when the war or impasse is going to end, prices will remain elevated.”  

His warning comes amid mounting concern across the aviation and energy sectors over the impact of the continuing disruption around Hormuz, through which roughly a fifth of global oil supplies normally transit. 

Mr Forson said Cargolux had already removed all Middle East stops from its network, except Muscat in Oman, and otherwise “we continue to fly the network we had previously”.  

The carrier suspended services to Amman, Riyadh, Dammam, Bahrain, and the UAE, and rerouted flights “almost overnight” after the conflict escalated.  

Cargolux also evacuated staff and pilots from Dubai as the security situation there deteriorated.  

While the airline has not yet experienced fuel shortages, Mr Forson said the risk would increase significantly if the crisis persisted  medium-term. 

“For me, if the situation in the Middle East continues… I think at some point, there will be a shortage,” he said. “Governments around the world do have emergency stocks on hand, but those are not meant to cover month after month after month of shortages.”  

But he added: “The shortage of jet fuel will be the least of our worries, because the global economy is going to go through an extremely difficult time.”  

Rising energy costs would feed directly into inflation through higher logistics costs and reduced consumer spending, he said.

“One thing that is built into every single product that we consume is logistics,” he added. “With the price of the energy needed for logistics increasing significantly, this is obviously going to be passed on to the consumer.”  

And he warned the impact would spread well beyond aviation fuel, potentially affecting diesel, petrol, fertiliser production, and industrial gases such as helium, which is used in cooling data centres – now a major vertical for air cargo.  

The disruption is already having a knock-on effect across wider air cargo markets. 

At a Coface event in Australia, ICAL International Customs and Logistics director Mark Coleman said cargo capacity had tightened significantly as passengers avoided Middle Eastern transit hubs and airlines reduced frequencies because of fuel costs. 

“People who would normally go via the Middle East started looking for flights via the US and Asia,” he said. “But from a cargo point of view, that caused huge restrictions. Passenger luggage will always get priority and, as a result, getting space on these flights became a bit of an issue; they were leaving cargo behind,” he continued, noting that 90% of Australian air cargo moves in bellies. 

Airlines are also beginning to move into defensive financial positions. 

Cebu Pacific, for example, has suspended dividend payments and shifted into ‘cash-preservation mode’ because of the fuel volatility linked to the Middle East conflict. Chair Lance Gokongwei said the carrier’s priority was now “to maintain a strong and resilient cash position”.

And Air India is reportedly considering staff furloughs, executive pay cuts, and capacity reductions as longer routings, fuel costs, and weaker demand put pressure on profitability. 

Cargolux currently relies primarily on fuel surcharges rather than large-scale hedging to offset rising fuel costs.  

“We do hedge… but not high volumes,” Mr Forson explained. “Our first line would be our fuel surcharge mechanism, followed by hedging.” 

Hong Kong fuel surcharge disclosures show Cargolux has levied a long-haul surcharge of US$1.10/kg since late March, although the carrier’s detailed surcharge tables are not now publicly accessible. 

Despite sharply higher fuel prices, Mr Forson said cargo demand and yields had so far remained resilient. 

“Demand remains fairly healthy,” he said. “Rates and yields remain fairly robust, which has helped us offset the additional costs.”  

However, he acknowledged the fuel crisis would likely weigh on Cargolux’s profitability next year. The carrier announced revenues of $3.4bn for 2025, resulting in profit after tax of $465m at the end of April, marking 13 consecutive years in profit. 

“Based on what I’m seeing now, and what we’re having to pay for jet fuel, I think it is not going to be at the same level [next year]. It will be lower.”  

The executive also questioned whether the current global environment of repeated geopolitical shocks had become the ‘new normal’ for the cargo sector. 

“I hope within the next three to five years things start normalising,” he said. “If we can’t get to that stage, then we’re going to be in a perpetual state of having to react to crises as they develop.”