The Ben Mulroney Show - How Trump and Iran have sowed chaos in the airline industry

Episode Date: April 17, 2026

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This podcast is brought to you by the National Payroll Institute, the leader for the payroll profession in Canada, setting the standard of professional excellence, delivering critical expertise, and providing resources that over 45,000 payroll professionals rely on. Yeah, maybe not. Maybe not. Air Canada, the big news today. Air Canada is suspending Toronto and Montreal to JFK flights starting on June 1st,

and they believe they are going to resume them at the end of October. This is a huge route between the biggest city in Canada and the biggest city in the United States. The pause affects one Montreal flight and three Toronto flights. And the cause of this is the uncertainty in the Middle East and what is happening in the Strait of Hormuz. And you'll remember, we've been talking about this for a long time, but you know, you're busy. Everyone's busy and they're living their lives and they're taking their kids from point to point B. and you might not have time to know. The Strait of Hormuz is a very narrow passage through which 20% of the world's oil and natural gas passes.

And without that access, without that free and unfettered access, chaos is abound. And when Donald Trump started this war and Israel started this war, it started and it started and continued. with noble intent in my opinion. Iran is a bad actor. Iran has no, the Iranian regime has no business existing. But when Donald Trump sat down with his colonels and his military leaders and said, give me the scenarios that are likely to be the outcome of this campaign, what we are living today as a global community was not on the agenda. Like no way. The chaos that has been sown in energy markets around the world, that there's no way anyone had that on their bingo card. Europe may be out of jet fuel in six weeks.

We may get to that point as well here in Canada, but if you're traveling through Europe, they can at least put you on a train. Do you want to fly to Van, do you want to replace your trip to Vancouver by getting on CN Rail or via rail? I don't think so. Meanwhile, Kier Starmor, the Prime Minister of the UK, said that his nation will lead a mission to protect shipping in the Strait of Hormuz. I can confirm that along with France, the UK will lead a multinational mission to protect

freedom of navigation as soon as conditions allow. This will be strictly peaceful and defensive as a mission to reassure commercial shipping and support mine clearance. We invite all nations with an interest in the free flow of global trade to join us. Some have already indicated their readiness to contribute. I want to reiterate, Europe may be out of jet fuel in six weeks.

What happens? What happens to business? What happens to tourism? What happens to trade? What happens to freight? What happens to Europe? What happens? What happens to the economy of the world?

If one of the biggest trading blocks stops being able to get things and people in and out, that may be why Kier Starmor, who was no fan of this intervention, has now jumped in to do something. Mark Carney, our prime minister, his office rather, said that Canada stands ready to help ensure safe passage through diplomatic efforts. and to provide, quote, support for crew safety and security, but didn't mention the prospect of a military assistance. Because there's very little.

I think we got, what, like three frigates at this point? We don't have a lot yet. We will in the future. Thank you, Mr. Carney, for making that a priority. So I was under the impression. I'm following this as closely as I can. I was under the impression that there was a temporary ceasefire. And that ceasefire was what was central to it.

it was the reopening of this straight. Is it open? Is it not? Is it conditionally open? What is the state of play there? According to the Globe and Mail, Iran reopens the Strait of Hormuz, but Trump says a U.S. blockade remains. That's the headline.

Does that make sense to you? So they open it, but there's a blockade. Okay. Iran's foreign minister said the Strait of Hormuz is, quote, completely open to commercial ships for the remainder of the ceasefire. However, right before we came to air, Intrepid, who nothing falls through the cracks with Intrepid, found that Islamic Republic state broadcasting,

after this, after the minister of state said it was open, they retweeted, the Americans talk excessively and create noise around the situation. Do not be misled. there is no new agreement. The reason for the limited reopening of the Strait of Hormuz is the implementation of the ceasefire in Lebanon. So is it clear to you now? And let's remember, in a regime like Iran, the state broadcaster says what the state wants.

And they are directly contradicting one of their leaders in a tweet. So make that make sense. So are you confused? In a word? Chaos. Chaos. It's chaos. It is chaos. And then Donald Trump, on his social media, says that, where did he go here? The USA will get all nuclear dust created by our great B2 bombers.

No money will exchange hands in any way, shape, or form. The deal is in no way subject to Lebanon either, but the USA will separately work with Lebanon and a deal with Hezbollah in an appropriate manner. Israel will not be bombing Lebanon anymore. They're prohibited from doing so by the USA. Enough is enough. Thank you, says President Donald J. Trump. But here's the thing.

Even if you could snap your fingers and everything went back or like there's peace, right? And everyone just put down their arms. That area that is so central to energy production in the world means it's going to take years, years to get back to where we were. Oil prices plunged 10 to 12%. Global stocks jumped on the news that major shipping companies warned it's going to take a long time just to get back to normal flow of traffic. And because all of this is you're getting different pieces of information at different times

being contradicted, that chaos that we are talking about, that is one of the reasons that you're seeing stock prices going up and down, and you're seeing oil prices fluctuating in ways I don't think I've ever seen before. This is, I want to go back to what we said at the beginning. When Donald Trump set out to do this thing, this campaign against a tyrannical regime that has been exporting terror around the world, I don't know that the military men thought, Well, they also export a lot of oil.

And they are central to that ecosystem. And I don't think anybody expected that this is the level of knock-on nonsense that we would be dealing with here in this country and around the world. I want to repeat it because I think it's of all of this, it should be the most headline-grabbing piece of information. Europe could be out of jet fuel in six weeks. Just in time for summer, right? Like, just try to think what happens to a country, what happens to the continent of Europe if it's landlocked? In a word, chaos.

Yeah, yeah. I mean, this has shades of end of world stuff. Like, what do you do? How do you get your, what happens to all the businesses that are trading with the world. How do you get your, I mean, some of it gets on ships, but some of it gets on planes.

What about people, the free exchange of people? What about tourism? Like I said, tourism, what happens to the world capitals? What happens to their businesses? What happens to the hotel business? What happens to arts and culture? It's, I don't know that I've ever seen anything like this before.

And like I said, even if they are able to get a deal that allows for, even if it's not peace right now, it's stability. There has been so much damage to the infrastructure of Iran that they, and not Iran, don't forget what Iran did to Qatar, to the UAE, to Saudi Arabia. They were blown up refineries everywhere in an effort to be, to sow chaos and, well, do what they do with terrorism, but now they're doing it with oil. So, listen, this is a conversation we're going to have all day.

We've got John Graddock. He's a faculty leader on aviation management. We're going to talk about the state of play for Canadians, Europeans, and the global market. How much jet fuel is there in the world? And how can we make more? That's coming up next. Welcome back. And in our last segment, we tried to get you up to date on the impact of the war in Iran on the Strait of Hormuz,

which is now having an impact on airlines and their ability to get jet fuel. Air Canada has fallen victim to this scarcity by announcing that it is closing off a few pretty significant routes from Toronto and Montreal to JFK Airport in New York. We told you, we gave you a lot of information. Suffice it to say you can boil it down to this. In a word, chaos. Yes, indeed. But here to help us find some order in that chaos is John Graddock, faculty lecture on aviation

management at McGill. John, welcome. Welcome. My pleasure to be here with you. Thank you so much. Okay, so yes, this is chaotic. Iran, this seems like this is their battle plan was to sow this kind of chaos, and they've been very successful at it.

Fill in the blanks, let's give us some structure to this. I think that, you know, this is, you know, what great Iran has done is really take one of the true points we have in international transportation. The other two are being the South China Sea and the Panama Canal. and if any one of those three go down for whatever reason, you know, you now have a chaos happening in your supply chain globally. So that's what we've seen.

The Stradahor moved down for six weeks, seven weeks. It's basically applied chaos to the world of the price of oil, as we know, the price of gasoline, and more so the price of aviation fuel. And now we're in a situation where because of that lack of fuel, we're stuck. So, John, give me a sense. Give me a sense of where this crisis fits on the pantheon of energy crises that we've had in our existence.

Yeah, from an aviation perspective, you know, I'll keep it there rather than try to do automobile. Aviations, we're basically sitting in a situation where we've never had a crisis of this extent. We've had crises with prices, and we've had them a number of times over the last quarter of half century, but never at the supply side. Yeah. So this supply side is the one that's causing the most grief as far as the airline industry's concerned. And there's not much joy to be had in trying to fix it. Yeah.

And so, John, there's not, this isn't just about the choke point of the Strait of Hormuz, but it's also about the knock-on damage that Iran's missile volleys have done at the refineries all over the region. Is that fair to say? That's correct. You know, there's a couple of large refills. refineries in Qatar that basically specialize in aviation fuel. They provide most of the aviation fuel for Asia and for Europe. Those refineries have been shut down.

I understand that some of them may have been damaged with a missile and drone attacks over the last few weeks. So even if the Strait of Hormuz opens up tomorrow, which it seems likely at mine down, but we're not going to get, you know, we have to check out those refineries and see what the damage is, those refineries. And if they require work, which I think they do, this aviation fuel shortage could last. for a while yet. And give me a sense of what a while might be. A year. So a year of fuel shortage. So that's going to naturally slow down the global economy because if you can't move people and freight and just things, everything slows down. We heard before, is it true

that Europe could be on the verge of not having jet fuel in six weeks? Yeah. And something's going to happen with that. Even if it's a straight-up-h-h-h-moos opens up today. To get tankers to fill up with aviation fuel or crude and get them to refineries in Western Europe or in Southeast Asia that can process that oil and convert it into diesel fuel into aviation fuel. You know, that trip is seven weeks. Yeah. So, you know, then, but, you know, the whole, you're going to be in a situation where you won't get aviation fuel showing up at those airports, the new aviation fuel for another three months.

So, John, so. In the meantime, we're out of fuel. So what happens if somebody's got, I hurt. a woman on the radio today. She was in BC. She lived in Comox. And she prepaid, she and her entire family prepaid for a trip from Comox to Vancouver, Vancouver to Halifax, to the Netherlands for later this summer.

Right. And so what's Air Canada going to do, for example, if they know that on the, at the end of their, their trip, wherever they're headed, there's no fuel for them to get home. Right. So they're going to cancel the whole thing. Well, they'll make the offer. to the passenger. They'll make the offer to the passenger and say, you know, here's the situation.

And, you know, both ends of the flights are working out and back. They're still being scheduled. They're still being planned to operate. But if you make enough noise and you talk about the way in which insurance policies work these days, it might be a chance for you to have a conversation with the airline. And the airline may say, okay, you can cancel both. Here's a cancellation fee. And here's the rest of your money back.

But for the, you know, the issue is going to be, if you're looking to get, Air Canada to put you on another carrier. Yeah. To get you to your destination and back, that's going to be problematic because not many carriers are going to be willing to take that risk and take you on for a trip that they know themselves might be a risk. So I like to be a little positive in these whenever we talk about these crises because every crisis, if you look at it through the proper lens, can be an opportunity.

And I wondered, John, in your expertise, now it feels like this crisis, crisis has shown a light on a system that we've been relying on, but it's truly that could be so easily disrupted by a bad actor. How do we rebuild this in the future so that the, you know, countries, the Western countries have more control over their aviation destiny? Well, you know, we have to build refineries. And as you know, refineries are not clean. They're not easy to to build and they're expensive. They take a lot of time to build. And people don't want these in their backyard.

I think they've got to ask themselves, John, what do you want? Do you want something like this somewhere in Canada or do you want the world we're living in right now where people can't? You ask me the question of what do? No, of course. How does the interest? No, of course. The change is we need more diverse sources of aviation field. Yeah.

You know, the next crisis could be in the South China Sea when China decides to invade Taiwan. And that shuts down the South China Sea and then all of your products coming out of China are now, you know, your SOL. Those products won't work. So, you know, the thing is we have to understand that there's risk in the world that we live in today. And the question is, how do you plan around mitigating that risk? Yeah. And what do you do to make sure that you have a supply chain that's resilient? So this has learned, this lesson is the worst we've ever had in the industry.

We've never had a production issue. We've had prices, but never supply. This is the first one we've had supply, and the industry is in shock. Really, and there's going to be some carriers and not going to be able to make it. You're right. We'll see carriers go bankrupt. You'll see planes parked. You'll see people being laid off.

The question is going to be one. So what have we learned out of this exercise? And the industry is good at learning things. And so the question is going to be, how do I, in fact, build redundancy somehow, some way into my supply of aviation fuel. And my thinking is that the key driver of that redundancy is going to have to be building more refinery. in more politically stable locations. And Canada would be one of those places? Yes, sir.

Yeah. So we have the capacity to get this stuff out of the ground? No? And refine it here. Somewhere, somewhere. Right now we have seven refineries in Canada that produce 85% of our aviation fuel. So we are self-sufficient in our own fuel. Now, do you want to become a supplier to the world of aviation fuel?

Yes, please. So there you go. So you know that the key is, you know, the key is, refineries and pipelines and pipelines. So I think that that's where the debate is going to be taking place in terms of lessons learned and who's going to take the investment and how do you get away from this nimbie thing that we have about refineries. So it's going to be an interesting debate for sure. John, I want to thank you so much. I think the chaos that I laid out in the beginning, I think people are breathing a little more calmly now because your voice of reason

allowed us to understand it a little bit more. So I wish you, great end to your Friday and have a great weekend. Thank you, sir. Have a great weekend yourself. Take care. Intrepid. That was very interesting. Yeah. Like really interesting, dude. Well, I mean, it's clear that Canada's got an opportunity. But it's a question of, the door's open. If the door is open. The street might be open, kind of, but the door is open.

The door has been open for this sort of opportunity in Canada for years. Yeah. We've had leaders who have been unwilling to walk through that door. and they've been punting the ball. And now we have a prime minister who wants to show that he knows markets and he knows investment. We're going to be talking about a little bit later about a summit that he has organized where he's bringing investors to Canada who have trillions of dollars to invest. And he wants some of that here. Perhaps he can make the claim we could be the we could be selling aviation fuel around the world.

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