AVIATION fuel expenses developed into a perfect storm before they flattened out in July, according to S&P Global data issued by the International Air Transport Association.
Data from the joint Platts - IATA Jet Fuel Price Monitor shows the jet fuel price for the week ending July 15 was up 85.7 per cent compared with a year ago at US$146.4/bbl. reports London's Air Cargo News.
In February, against a backdrop of strong demand for still limited capacity due to the pandemic, the Ukraine-Russia war forced airlines to fly longer routes to avoid Russia-Ukraine airspace and increase their fuel usage, and now inflation is rising around the world.
The jet fuel price average for 2022 at the time of writing (year to date) is $143.6/bbl. The impact of jet fuel price developments on 2022's industry total fuel bill is $134.3 billion.
A McKinsey & Company article published in July stated that according to US Energy Information Administration (EIA) and Federal Reserve Bank of St Louis economic data, since the start of 2022, the price of jet fuel has increased 90 per cent and costs roughly 120 per cent more, on average, than it did in 2021.
'Counterintuitively, high fuel prices might not necessarily be a bad thing for the industry. Even though it causes short-term pain, it also increases marginal costs of flying - which can foster greater capacity discipline. This, in turn, drives healthier industry economics and can help profitability,' said the report.
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Data from the joint Platts - IATA Jet Fuel Price Monitor shows the jet fuel price for the week ending July 15 was up 85.7 per cent compared with a year ago at US$146.4/bbl. reports London's Air Cargo News.
In February, against a backdrop of strong demand for still limited capacity due to the pandemic, the Ukraine-Russia war forced airlines to fly longer routes to avoid Russia-Ukraine airspace and increase their fuel usage, and now inflation is rising around the world.
The jet fuel price average for 2022 at the time of writing (year to date) is $143.6/bbl. The impact of jet fuel price developments on 2022's industry total fuel bill is $134.3 billion.
A McKinsey & Company article published in July stated that according to US Energy Information Administration (EIA) and Federal Reserve Bank of St Louis economic data, since the start of 2022, the price of jet fuel has increased 90 per cent and costs roughly 120 per cent more, on average, than it did in 2021.
'Counterintuitively, high fuel prices might not necessarily be a bad thing for the industry. Even though it causes short-term pain, it also increases marginal costs of flying - which can foster greater capacity discipline. This, in turn, drives healthier industry economics and can help profitability,' said the report.
SeaNews Turkey