The European Commission has rebuffed industry pressure to ease passenger compensation rules during the jet fuel crisis, telling airlines that the cost spike from the war in Iran does not qualify as an “extraordinary circumstance” under EU261 and that canceled flights still trigger payouts.
EU transport commissioner Apostolos Tzitzikostas set out the position in an interview with the Financial Times published on May 7, 2026, ahead of new Commission guidelines due this week. According to the FT, the draft text clarifies existing rules rather than carves out new exemptions, framing fuel cost management as a normal part of running an airline.
The intervention lands as European carriers race to thin out their summer schedules. Around two million seats have been pulled from May rosters in the past fortnight, on top of the thousands of flights already cut since Operation Epic Fury began on February 28, 2026. The bloc normally sources around 75% of its jet fuel imports from the Middle East, with US shipments now filling part of the gap.
Compensation exposure runs into billions
EU261 entitles passengers between €250 and €600 for cancellations notified less than 14 days before departure, plus a refund or rerouting. The regulation generated an estimated €6.5 billion in potential compensation across 218,000 disrupted EU departures in 2024 alone, of which roughly two-thirds typically go unclaimed.
A summer of fuel-driven cancellations on top of that baseline would significantly raise exposure, particularly for carriers without the financial cushion to absorb them. Airlines for Europe and Airports Council International Europe have both lobbied Brussels for emergency relief in recent weeks.
Tzitzikostas told the FT that “jet fuel prices are not extraordinary circumstances” and that cancellations made on commercial grounds remain the airline’s responsibility. He acknowledged some routes had become unviable at current fuel levels but described those decisions as business choices rather than events outside the carrier’s control.
Reform fight in the background
The Commission’s hard line arrives mid-way through a longer-running fight over EU261 itself. In January 2026, the European Parliament voted to keep the three-hour delay threshold for compensation, set the payout band at €300 to €600, and demand that the list of extraordinary circumstances become exhaustive and subject to regular updates. EU member states had previously pushed in the opposite direction, seeking a four-hour threshold and a lower €300-500 range.
Tzitzikostas told the FT that Brussels would only revisit the rules if conditions deteriorated significantly, without specifying the threshold that would trigger a review.
Capacity cuts widen across Europe
Lufthansa Group has removed roughly 20,000 short-haul flights from its summer schedule through October 2026 and permanently grounded the 27-aircraft fleet of regional subsidiary Lufthansa CityLine. SAS canceled around 1,000 flights in April after pulling several hundred more in March, mostly on short-haul Scandinavian routes. Turkish Airlines suspended 18 international destinations starting in May as part of its largest network adjustment in years. Air France-KLM raised long-haul fares by €50 per round trip rather than cancel outright.
The financial pressure is concentrated on carriers that entered 2026 under-hedged. SAS had hedged none of its fuel consumption coming into the year. AirBaltic had covered just 6% of its current-quarter requirement, the lowest reported figure in Europe. Both have absorbed the spot-price shock directly, with northwest European jet fuel hitting $1,840 per metric ton on April 3, 2026, a Platts assessment record.
