Washington Takes Notice as Jet Fuel Prices Rise

Air travel recovery faces strong headwinds. White House National Economic Council Director Brian Deese said the administration is closely monitoring the rising jet fuel prices. He added, "Jet fuel is something that we are paying close attention to and monitoring and is a direct bi-product of the impact of Russia's invasion of Ukraine," Jet fuel prices have surged, particularly on the East Coast.

As COVID restrictions have lifted, jet fuel prices have become their own restriction. As a result, U.S. airlines have been raising the cost of flights to mirror and account for rising operating costs. Many travelers are choosing alternatives that don’t require long and expensive flights. Vacation flights and work travel have become more expensive, stifling the COVID restriction lifts.

Outside of the U.S., India is leading the recovery of jet fuel demand in Asia, with current seat capacity and flight numbers exceeding pre-pandemic levels. Momentum in Australia and Southeast Asia is also picking up. However, lockdowns in China are weighing on the regional outlook of the aviation industry.

Airlines and travelers alike face challenges as fuel prices drive lower consumer demand. Tailwinds would be a welcomed change for the segment.