How the Iran war fuel price shock is hitting Windsor’s YQG

Rising jet fuel costs are adding pressure onto the Windsor International Airport and could stunt its plans for growth.

The Iran war fuel price shock that’s sent airline fares, and fuel supply concerns, sky high may stunt growth plans at Windsor’s airport as it deals with yet another crisis plaguing the industry.

Mark Galvin, the president and CEO of Windsor International Airport and its operating company Your Quick Gateway — a play on the airport’s regulatory identifier YQG, is optimistic perseverance can help the local airline hub navigate the latest turbulence.

“We’re constantly meeting with airlines to try to pitch those routes, to try to pitch those things that we think would be successful here,” said Galvin.

The aviation industry has faced crisis after crisis in the last handful years beginning with the COVID-19 pandemic, Russia’s invasion of Ukraine, and a global pilot shortage.

There has also been the drop-off in U.S.-bound visits with which Canadian airlines have had to contend.

Now, a fuel supply shock has been added to the list as a result of the war in Iran launched by U.S. and Israeli forces in late February.

Galvin stressed in an interview with CTV News, Windsor’s airport is not immune to the global forces playing out that see carriers looking to make safe bets with their operations.

“There can be hesitation,” said Galvin of carrier’s receptiveness to establishing new routes at YQG.

“Everyone’s being a bit cautious to see where it’s going.”

John Gradek, an aviation industry expert based in Montreal, doesn’t expect the fuel shock will heighten the risk of a carrier leaving the airport in the near or mid-term but, instead, frequency may be reduced as operators look to ‘shoulder services’ to avoid flying half-empty planes.

“They’re going to fly into peak [season] but not fly in the fall,” said Gradek.

“So, Air Canada’s done that. They have a few U.S. city fares they fly in the summertime that they’ll shut down early to mid-September as the summer season winds down.”

Airline trauma

Don’t ask Gradek to predict when things in the airline space could return to normal — his crystal ball is very cloudy.

“It’s something that it’s not as if you could say, ‘Okay, this will last three or four weeks and then we’re back to normal.’ We have no idea, no timeline,” said Gradek.

“We have no idea what normal is going to look like.”

But one thing Gradek doesn’t expect is a return to $70 USD a barrel for aviation fuel, possibly ever, as prices hover closer to the $140 USD mark.

He also doesn’t rule out the disruption running into the winter, saying there’s no quick fix to the fuel price mess in which the sector finds itself.

“Commercial aviation is going through trauma,” Gradek told CTV News.

“Once the Strait of Hormuz [Iran controls] opens up, we have some problems in getting those refineries up and running in the Middle East so it’s going to be a longer trauma than we would normally expect.”

And airline casualties could begin to add up as the crisis drags on.

Detroit-founded and American budget airline posterchild, Spirit, announced its immediate wind-down of operations on May 2, as it was unable to absorb the latest industry shock.

Flair Airlines, an Edmonton-based budget carrier, paused its flights from Windsor in 2024 and has yet to return as it consolidates its business in bigger centres.

While Gradek believes fuel supply is a virtual non-issue in North America, the price shocks that have seen a doubling of jet fuel costs are another story altogether.

“Our problems are not as compounded as they would be in Western Europe or Asia,” said Gradek.

“Flair may not make it. Air Transat may not make it. Those carriers have got some issues with respect to their financial capability.”

Air Transat, along with Air Canada, West Jet, and Porter, all fly out of YQG.

Path forward

When it comes to passenger levels, Galvin says Windsor’s traffic has yet to fully recover — only capturing about 50 to 60 per cent of those volumes.

Galvin, though, says it’s a gradual process to grow that traffic again and believes Windsor’s track record as a good airline partner serves it well as it looks to attract new business.

“We don’t serve a small catchment area,” said Galvin.

“So, we kind of bring that to the table to say that ‘We have the passengers, we have the base.’ And then it’s just the ability of the community to embrace those routes and fly them and then the more that happens, the easier it is for the next conversation, and the next conversation, and the next conversation.”

Despite recently losing a route to Cuba as major airlines abandoned service due to severe fuel and energy shortages, Galvin points to successful new routes that have taken hold in Windsor including to Ottawa, Toronto’s Pearson Airport, and Punta Cana.

He adds the route to Calgary has started flying passengers a month earlier than last season.

“We have to look at our own processes and our own structures to find the economies where we can find them,” said Galvin of tightening operations to weather the latest aviation storm.

“We don’t have the passenger numbers we did.”

As far as Gradek is concerned, airports like Windsor’s should be safe from major flight reductions as he believes demand is still strong from summer fliers.

“I don’t think we’re going to see much in terms of flight reductions, for smaller cities in Canada,” said Gradek.

“I think that we’re going to see a lot of attention being paid to certain days of the week when our flights might be low, we might have [fewer] multiple flights operating on Tuesdays or Wednesdays, or maybe even Saturdays may be subject to reductions.”