Wider economic recovery drives up jet-fuel costs for ailing airlines

Rising jet-fuel prices will make it harder for airlines to reach cash-positive positions in the coming months, according to industry body IATA. Speaking during a briefing Wednesday, the association’s chief economist, Brian Pearce, explained that the recovery in overall economic activity around the world is causing energy costs to rise. “Economists are actually increasingly positive about the wider economy,” Pearce states. “We’ve seen this V-shaped recovery in global industrial production.” While that is “pulling up [air] cargo demand” to the benefit of some airlines, jet-fuel costs are tracking the rise in crude oil prices. With average load factors of less than 50% on the international passenger flights that are possible today, “you can now see that airlines are having to pay more than $70 a barrel for jet fuel, which is almost as expensive as it was before the crisis”, Pearce says.<br/>