The International Air Transport Association (IATA) has said the price of jet fuel has continued to increase in recent weeks, with its price increasing by 70% since the start of 2021.
According to IATA, a Switzerland-based trade organisation representing over 290 international airlines, the increase in Jet A1 price is putting pressure on airlines’ operating costs and threatening the industry’s profitability.
In its October “Airlines Financial Monitor” released Tuesday (9 November), IATA said jet fuel price continued to trend upwards in recent weeks as economic activity restarted around the world and supply remained tight.
It added that as of early November, jet fuel price was 70% higher compared to the start of the year.
Passenger revenues have declined by 34% in the third quarter of 2021 compared with the pre-crisis in the third quarter of 2019, while cargo revenues have risen by 65% over the same period amidst increased cargo demand.
The IATA report said the total airline revenues went down by 30% – a robust improvement on the 46% decline in the second quarter of 2021.
The fall in operating costs in our airline sample was lower than the fall in revenues, at -18% as against the third quarter of 2019.
The rising fuel prices increased pressure on fuel costs (down 27% in Q3 2021 vs -45% in Q2 2021).
However, other variable costs have also been rapidly returning with the traffic restart, reinforcing the need for all partners in the air transport supply chain to carefully manage costs in a still weak revenue environment.
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