Analysis: Longer ceasefire could lift consumer confidence

The oscillation between hopes of peace and warnings of war in the Gulf, accentuated by US strikes on Iran on Tuesday, offer limited hope of an imminent resolution of the uncertainty and economic pressures weighing on consumer sentiment.

However, an extension of the existing US-Iran ‘ceasefire’ while talks continue appears a reasonable hope – not least as US President Donald Trump seems to have little idea how else to salvage the situation.

The conflicting signals saw Iranian negotiators head for talks in Qatar on Monday as a senior Iranian source insisted “no one can claim an agreement is imminent”, rebutting Trump’s claim at the weekend that a deal was “largely negotiated” with “final details [to] be announced shortly”.

The president was obliged to segue into asserting the US would “not rush into a deal” while specifying “the Strait of Hormuz will be opened”, contradicting an Iranian claim that it would “manage” the Strait.

So, a touted 60-day extension of the ceasefire, allowing more time for diplomacy and a gradual reopening of the Strait, may be the best hope.

Yet this would take us to late July and not mean imminent relief of the squeeze on oil supplies and prices, which seems likely to run through the summer.

For now, at least, European carriers appear confident of fuel supplies remaining sufficient to maintain marginally reduced schedules. That was the message of Jet2, easyJet and Ryanair last week.

Jet2 insisted the “summer is on”, reaffirming confidence it will “operate its flying programme as normal” as fuel suppliers report “increased production and additional imports from areas unaffected by the conflict”.

EasyJet reported “strong late bookings” but conceded “forward bookings have been impacted... resulting in a later booking curve” as it reported half-year results to the end of March, while affirming its intention “to operate the full summer schedule on sale” and 2% more capacity this summer than last.

Chief executive Kenton Jarvis acknowledged “significant uncertainty” while insisting easyJet “is not seeing any disruption to fuel supply”.

The carrier’s pre-tax half-year losses rose to £552 million despite a 6% rise in passenger numbers and with only an extra £25 million in fuel costs in March.

Ryanair deputy director for flight operations control Conor Gillardy, speaking on a Eurocontrol webinar, said: “We have good eyes on the fuel situation to the end of June. We’re quite confident.”

The airline to have suffered most disruption, Qatar Airways, gave least away on the impact of the war, referring only to “a final month impacted by significant geopolitical events” when revealing a post-tax profit of $1.94 billion for the 12 months to March. These events “closed our airspace and significantly curtailed our operation, the consequences of which remain very much present”.

This hardly captures the extent of the disruption, and costs, to passengers and travel business partners which “remain very much present”.