Two of Europe’s biggest airlines have cancelled hundreds of flights in response to soaring fuel costs caused by the Iran war.

Lufthansa on Thursday announced plans to shut down its regional airline by the weekend, while Dutch-based carrier KLM axed 160 flights for the coming month.

It came as the head of the International Energy Agency (IEA) warned Europe to brace for a wave of further flight cancellations triggered by jet fuel shortages.

Europe has “maybe 6 weeks or so [of] jet fuel left,” Faith Birol said. Last week European airlines warned shortages could hit in as little as three weeks.

Rachel Reeves said there were “no issues with supply at the moment” in the UK. The Chancellor told the BBC the Government was “monitoring the situation very carefully” but was “confident” of current supplies.

Lufthansa, Germany’s flag carrier and largest airline, said its CityLine division would ground its entire fleet of 27 aircraft. CityLine provides business flights between European airports.

The German airline will also take six planes from its international fleet out of service after the summer holiday season, warning that flight cutbacks could last into winter.

KLM also announced cancellations but said it will affect less than 1pc of its schedule.

Both airlines said the moves had been forced on them after the Middle East conflict sent fuel prices soaring.

European jet fuel prices have risen by more than 120pc since the start of the war, according to the International Air Transport Association.

Till Streichert, Lufthansa’s chief financial officer, said the capacity cuts had become “unavoidable in light of the sharply increased kerosene costs and geopolitical instability.”

Faith Birol, the head of the International Energy Agency (IEA), warned of a wave of further cancellations across Europe as jet fuel supplies run low.

“I can tell you soon we will hear the news that some of the flights from city A to city B might be cancelled as a result of a lack of jet fuel,” he said.

It risks derailing holiday plans for many families hoping to get away this summer.

EasyJet said higher jet fuel prices cost it about £25m last month alone. The Luton-based airline warned of losses of between £540m and £560m for the six months to the end of March.

However, Kenton Jarvis, easyJet’s chief executive, downplayed fears of fuel shortages. He said all the airports it serves were “operating as normal”.

“We only ever in this industry have three to four weeks visibility [of jet fuel supplies], and that is the same as it was pre-crisis,” he said.

“We have visibility to the middle of May, and we have no concerns.”

The European Union is drawing up plans to counter any shortages. The EU imports around 75pc of its jet fuel from the Middle East, making it especially vulnerable. 

A British diplomat said they had been briefed on a plan to pool resources and buy jet fuel, which could involve third countries including the UK.

The UK consumes about 13.5 million tonnes of jet fuel annually, of which only about 4 million tonnes are refined domestically.

The rest is imported, and about 40pc came from the Gulf before the Iran conflict started. The UK has since switched to sourcing jet fuel from the US, with record American imports expected this month and next.

A Government spokesman said: “We continue to engage with British airlines to support their operations against the backdrop of war in the Middle East, and to limit the impact on passengers.

“Most airlines purchase their aviation fuel in advance to offset price fluctuations, however we are aware of the impact to businesses, and are working with international allies to see a reopening of the Strait as soon as possible.”

Fuel costs have surged ever since Iran shut off the Strait of Hormuz, the vital trade artery that transports a fifth of the world’s oil and gas supplies.