Iata warns jet fuel prices could leap more than a quarter

A warning that jet fuel prices are set to soar by more than a quarter this year came today from Iata.

This comes against a backdrop of rising airline costs, the risk of trade wars and geopolitical tensions which are offsetting demand driven by lower fares.

Latest results from the airline trade body for May show global passenger demand rose 6.1% year-on-year, a marginal rise on the 6% figure in April.

Capacity climbed 5.9% and the load factor rose 0.1 percentage point to 80.1%.

Iata director general and chief executive Alexandre de Juniac said: “May was another solid month in terms of demand growth.

“As had been expected, we saw some moderation, as rising airline costs are reducing the stimulus from lower airfares.

“In particular, jet fuel prices are expected to be up nearly 26% this year compared to 2017.

“Nevertheless, the record load factor for the month signifies that demand for air connectivity is strong.”

He added: “Last month, Iata released its mid-year economic report showing expectations of an industry net profit of $33.8 billion.

“This is a solid performance. But our buffer against shocks is just $7.76. That’s the average profit per passenger that airlines will make this year – a narrow 4.1% net margin.

“And there are storm clouds on the horizon, including rising cost inputs, growing protectionist sentiment and the risk of trade wars, as well as geopolitical tensions.

“Aviation is the business of freedom, liberating people to lead better lives. Governments that recognise this will take steps to ensure aviation is economically sustainable. And aviation works best when borders are open to trade and people.”

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