Airlines’ latest challenge: Rising jet fuel prices

The oil rally is taking jet fuel along for the ride, posing another headache for airlines still struggling from depressed travel demand in the Covid pandemic. US jet fuel prices reached a nearly 13-month high of $1.67 a gallon on Wednesday, according to S&P Global Platts data, a climb led by an arctic blast and winter storms that disrupted oil production, refining and transportation. Millions were left in the cold and the dark in Texas, which largely relies on natural gas for heat and power. “We were expecting fuel to be at these levels by the second half of the year,” said Raymond James airline analyst Savanthi Syth. Costlier fuel can make it harder for airlines to stem their cash burn, a goal that has already been delayed due to weaker-than-expected demand. Spirit Airlines CFO Scott Haralson during a Feb. 11 earnings call cited higher fuel costs as being among the discount airline’s first-quarter challenges. The carrier expects fuel costs to be up 32% this quarter from the last three months of 2020. Greg Anderson, CFO of Allegiant Air parent Allegiant Travel, also cited higher fuel costs as a headwind during a Feb. 3 quarterly call. Jet fuel production is one of airlines’ biggest expenses along with labor.<br/>