Posts Tagged ‘jet fuel’

Air travel hit by Middle East and Japan

Wednesday, May 4th, 2011

Demand for air travel around the globe dropped from 5.8 per cent growth in February to 3.8 per cent growth in March compared to a year ago according to the International Air Travel Association. The fall has been directly blamed on the earthquake which hit Japan and the continuing troubles in the Middle East.

Also being blamed is the rising price of jet fuel. Leisure passengers are being put off by a number of airlines continuing to hike their fuel surcharges.

Despite astonishing growth recently, it was airlines in the Asia-Pacific region which were hit hardest with a drop of over two per cent on last year. In the US traffic fell by one per cent and in Europe demand was down by 0.5 per cent. Japan’s domestic air travel fell by 22 per cent on the year before. Following the earthquake, and subsequent nuclear disaster, airlines cut capacity to the country. Delta Airlines, which is one of the largest international carriers to serve Japan, estimated the crisis could cost it some $400 million.

Giovanni Bisignani, IATA’s director-general, said he expected the recovery of the airline industry to be supported by the recovery of the world’s economy, but warned that the high price of a barrel of oil was still a significant problem. Airlines around the globe are being forced to slash capacity because fuel accounts for around a third of their operating costs.

The Middle East continues to be an issue with travel demand to Tunisia and Egypt still well below what it was before the troubles started.

Singapore Airlines reduces Los Angeles service

Friday, April 22nd, 2011

Lack of demand has caused Singapore Airlines to announce that it will be scaling back on the number of services to Los Angeles. The airline currently flies seven times a week, but as of 3 May it will temporarily be suspending its Tuesday and Wednesday schedules. An airline spokesman confirmed that the decision had been made because of a need to match passenger demand with available capacity.

When asked whether the cancellations had been made in reaction to the rising price of jet fuel, spokesman Nicholas Ionides said that although the cost of oil was having a negative affect across the airline industry the decision to cut back on the Singapore-Los Angeles route had been made purely as a reaction to consumer demand.

The Los Angeles service is for business-class passengers and uses Airbus A345 aircraft. According to Ionides, the mid-week flights tended to receive fewer bookings than the others and this is why they have been removed.

The price of a barrel of crude is currently at a two-and-a-half year high. In its last monthly report the International Energy Agency issued a warning that the recovery of the world’s economy was at risk if the price of crude remained on the market at above $100 per barrel.

Airlines are continuing to try an offset the cost of jet fuel by handing on fuel surcharges to their passengers. British Airways recently told customers that long-haul journeys would be £10 more expensive for economy and £20 more expensive for those travelling in premium-class.

Qantas investigates turning rubbish into fuel

Tuesday, January 4th, 2011

Qantas has announced plans to construct a biofuel plant which would enable it to produce greener fuel for its fleet. The nation’s flag-carrier is currently in discussions about the project with Solena, a US based fuel supplier. According to reports, the plant would be built in Sydney and would create some 1200 jobs.

If construction goes ahead, the operation would be the second in the world to produce biofuel on a commercial scale. The plant would convert everyday rubbish, including household food scraps, tree cuttings, grass and industrial and agricultural waste into jet fuel.

A similar project is already underway in the UK. British Airways has teamed up with Solena to build a plant in London which, when up and running in 2014, will turn half-a-million tonnes of waste into over 70 million litres of jet fuel every year. BA claims this will be enough to run two per cent of the airline’s fleet out of Heathrow.

Airlines are coming under increasing pressure to reduce the amount of CO2 they currently pump into the atmosphere. Industry guidelines stipulate that a saving of 1.5 per cent on fuel efficiency be achieved by the end of the decade. The UN would like to see efficiency improve by two per cent.

By 2020 airlines are aiming to become carbon neutral and by 2050 carriers are aiming to have reduced emission levels to half those recorded in 2005. Spokeswoman for Qantas, Olivia Worth, said the agreement with Solena meant the carrier had committed itself to examining the feasibility of creating jet fuel from rubbish.

Oil prices cause BA to push up fuel surcharge

Wednesday, December 15th, 2010

As a reaction to the rising price of oil, British Airways has announced that as of this Thursday it will be adding an extra £10 to the fuel surcharge on its long haul tickets. Because the new charge applies to each sector of a journey taken, the price of a return ticket to many destinations will rise by £20.

Airlines around the world first started adding a surcharge to ticket prices on longer journeys as a way of combating the rising price of jet fuel. The additional ‘tax’ now makes up a substantial portion of the value of most tickets. BA said it would not be placing the charge onto the price of its short haul flights.

The surcharge could now be as much as £108 depending on how far a customer is flying and the type of class they have chosen to fly in. BA has not increased its jet fuel surcharge since the middle of 2008 and has actually reduced it twice since that time.

According to the International Air Travel Association (IATA) the rising price of crude oil is going to be a major problem for many airlines over the next twelve months. The body predicts that the average price of a barrel of oil in 2011 will be $84. This year it was $79.

In August, the price of oil was hovering around the $72 mark; it is now just over $90 for a barrel. According to IATA, the price of jet fuel has risen by 17.6 per cent over the past year.