Monday, July 15, 2024
Rising fuel prices may not be as bad for airlines as it seems

Rising fuel prices may not be as bad for airlines as it seems

New McKinsey & Co research suggests that fuel price hikes are putting airlines under strain— but may prompt airlines to limit overcapacity, leading to better returns and industry stability.

Since the start of 2022, the price of jet fuel has risen by around 90 percent—and costs roughly 120% more, on average, than it did in 2021.

Counterintuitively, high fuel prices might not necessarily be a bad thing for the industry as a whole. This article outlines what airlines have done in the past when fuel prices were high—and offers strategies that airlines could consider to mitigate the effects of fuel price hikes.

Notable discussion points include:

  • What the current landscape of steeply rising energy costs means for airlines
  • Three reasons why high jet fuel prices may not be as bad for airlines as expected
  • How airlines can remain profitable in times of high and low fuel prices

Read the full article https://www.mckinsey.com/industries/travel-logistics-and-infrastructure/our-insights/why-rising-fuel-prices-might-not-be-as-bad-for-the-airline-sector-as-it-seems

Picture of James Graham

James Graham

James Graham is an award-winning transport media journalist with a long background in the commercial freight sector, including commercial aviation and the aviation supply chain. He was the initial Air Cargo Week journalist and retuned later for a stint as editor. He continues his association as editor of the monthly supplements. He has reported for the newspaper from global locations as well as the UK.

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