IATA director general and CEO Alexandre de Juniac has again urged all concerned to ensure that air connectivity be maintained between Qatar and rest of the world.
“Because we are interested in the freedom of aviation, we want connectivity be maintained between Qatar and the rest of the world. The situation in the GCC region you are referring to, is a big political issue. Because IATA is not a political organisation, we cannot comment on it,” de Juniac told Gulf Times in an interview at the International Convention Centre in Sydney on Tuesday.
De Juniac pointed out the current jet fuel prices have not yet translated into higher fares for air passengers.
“For the moment, the impact of higher fuel prices is not very significant. The industry has tremendously increased its resilience to shocks. But if the higher price regime stays, the situation can change. IATA, however, cannot intervene in such a situation…it is for the individual airlines to decide on how to deal with the rising jet fuel price,” de Juniac said.
In its report at the World Air Transport Summit (WATS) on Monday, IATA (International Air Transport Association) said jet fuel prices are expected to jump nearly 26% this year and average $84 per barrel as IATA sees Brent crude averaging $70 in 2018.
This is up from $54.9 in 2017 (+27.5%) and IATA’s previous 2018 expectation of $60.
This year IATA forecasts that the airlines' fuel bill will rise to $188bn, which will represent 24.2% of average operating costs.
Fuel costs will account for 24.2% of total operating costs (up from a revised 21.4% in 2017), showed an IATA report presented at the World Air Transport Summit (WATS) in Sydney.
Overall unit costs are forecast to rise 5.2% this year, after a 1.2% increase in 2017; a significant acceleration, the report said.
The sharp rise in prices is being driven by the Opec+ output cuts, and the realisation that inventories need to remain higher than before now that Opec’s (Organisation of the Petroleum Exporting Countries) buffer role has gone. The impact on the industry’s fuel bill was dampened last year and to some extent this year by the impacts of fuel hedging in one or two regions.
Fuel is such a large cost that it focuses intense effort in the industry to improve fuel efficiency, through replacing fleet with new aircraft, better operations and efforts to persuade governments to remove the airspace and airport inefficiencies that waste around 5% of fuel burn each year, IATA said.