The alarm bell on a jet fuel crisis is now firmly being rung. The Airports Council International has said that Europe could face dangerous shortages if the Strait of Hormuz does not reopen in the next three weeks. The looming jet fuel shock would be another blow to the British economy, which has already been badly exposed to rising oil prices and is teetering on the edge of recession.

The most obvious impact is the damage to aviation itself. Air transport is worth £30 billion to the UK’s economy, according to the International Air Transport Association, and employs nearly 400,000 people in the country. Any shortage will have an immediate impact on the 25 airlines based in Britain. What’s more, these low-margin businesses with high fixed costs are badly placed to deal with a jet fuel shock. The Government will need to provide some sort of financial support for these firms, akin to the billions in credit provided during the Covid-19 pandemic. For a government already worrying about the cost of household support, a bailout for airlines will stretch the state’s resources even thinner.

More worrying, however, is the impact that any fuel shortage will have on the country’s critical service exports. Britain exports £550 billion in services to the rest of the world every year. Financial and related professional services exports alone are worth nearly £100 billion a year. Although this business is increasingly carried out online, it still depends on millions of business flights to and from the UK to cultivate relationships, pitch for business, and provide support on the ground.

Despite video and conference calling, there are still 5.3 million business flights every year that underpin Britain’s global trade. Many consultancy and service contracts stipulate a certain number of visits and days spent in the foreign country involved. Failure to deliver on these commitments will make it harder to win business in the future.

It cannot be overstressed how vital these exports are to the country. The UK’s dependence on imports for everything from food to electronics means that it cannot afford any damage to its service exports, particularly high-value professional and financial services. As the cost of goods rises in the wake of the Iran war, UK services will need to carry an even heavier burden in the short term.

Inevitably, a jet fuel shortage will lead to the rationing of flights. This will not be popular with the public, but bankers and management consultants will have to be given priority over family holidays if we are to limit the economic damage.

The prospect of besuited business class travellers getting the nod over hardworking families who have scrimped and saved to afford their one annual foreign holiday will inevitably push an already unpopular government even further down in the polls. The Government could sacrifice exports to avoid this pain, but that will further tip the economy towards recession. There are no easy options, but this is the reality that politicians have brought on themselves by creating such an imbalanced economy.

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Andrew O’Brien is the former Director of Policy at the think tank Demos and currently Head of Secretariat of the Independent Commission on Neighbourhoods. He writes in a personal capacity.

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