In the aviation industry, where profit margins are slim and operational excellence is critical, flight planning, buffer time, and fuel management are key to improving operational efficiency. These elements, when effectively managed, can significantly reduce costs, enhance reliability, and decrease the environmental impact. This approach distinguishes successful airlines in the competitive aviation market. 

By focusing on these areas, aviation operators can navigate the complexities of the industry more effectively, meeting and surpassing the expectations of passengers and regulators, and securing a strong position in the market.

Mastering Flight Planning for Efficiency

Flight planning stands as the strategic cornerstone of aviation operations, embodying a complex process that ensures flights are conducted safely, efficiently, and in compliance with all regulatory requirements. At its essence, flight planning involves the meticulous preparation and execution of a flight path from departure to arrival, taking into consideration a myriad of factors that influence the flight’s overall efficiency and safety.
This critical process involves:

• Route Selection: Choosing the most efficient path, considering weather, airspace restrictions, and fuel use.
• Fuel Calculation: Determining the optimal fuel load, including reserves for emergencies and diversions, to balance safety with efficiency.
• Weather Analysis: Using forecasts to avoid adverse conditions and optimise routes.
• Regulatory Compliance: Adhering to international and national rules, securing necessary permissions, and planning for contingencies.

Effective flight planning reduces costs, minimises environmental impact, and improves reliability. Advances in technology have transformed this process, enabling dynamic adjustments to enhance operational efficiency. In essence, flight planning combines strategic analysis and proactive management to optimise every aspect of a flight’s operation.

Innovating with Buffer Time for Reliability

The aviation sector is notorious for its unpredictability, with potential delays, ground handling inefficiencies, and weather disruptions being perennial challenges. Buffer time is essentially a strategic allocation of extra time inserted into schedules to absorb the impact of such unforeseen delays and disruptions. It acts as a cushion, allowing for the accommodation of operational variances without compromising the overall timetable or passenger convenience. By building in buffer time between flights, airlines can maintain schedule integrity, ensuring that the domino effect of delays does not disrupt the entire day’s operations. This strategy is vital not only for enhancing punctuality but also for improving the overall passenger experience by reducing the stress and inconvenience associated with tight connections and rushed transfers.

Maintaining schedule flexibility is equally important. Adjustments based on real-time data and emerging situations—such as rerouting flights, swapping aircraft, or adjusting ground handling procedures—ensure smooth operations despite unforeseen challenges. This flexibility allows airlines to dynamically optimise their operations in response to changing conditions, not just as a reaction to problems but as a proactive measure to maintain efficiency and customer satisfaction.

Elevating Fuel Management to New Heights

Fuel management is a pivotal element of flight operations, impacting both an airline’s environmental footprint and its financial health. Beyond merely filling the tanks, it entails sophisticated strategies for optimising fuel consumption, including choosing the optimal cruising altitude, managing engine thrust, and devising efficient flight paths. In an era where fuel costs loom large over airline expenses, these practices are indispensable.

Incorporating advanced aircraft designs that boast superior aerodynamics, adopting weight reduction strategies, and utilising sustainable aviation fuels (SAF) are all part of a broader move to lessen reliance on traditional fossil fuels. These concerted efforts not only foster significant cost savings but also propel the aviation sector towards its environmental objectives, marrying operational efficiency with sustainability.

The multifaceted importance of fuel management encompasses a range of critical aspects:

• Safety: Proper fuel management is essential for reducing the risk of fuel exhaustion, ensuring there’s enough fuel to safely reach the destination and any alternates. It also optimises aircraft weight, enhancing takeoff, landing performance, and safety margins.
• Cost Efficiency: With fuel being a major operating expense for airlines, minimising consumption directly affects the bottom line. It also leads to reduced maintenance costs, as optimally loaded aircraft exert less stress on engines and airframes.
• Environmental Impact: Efficient fuel use translates to lower emissions, aligning with global efforts to mitigate the environmental impact of air travel and helping airlines meet stringent emissions regulations.
• Operational Efficiency: Accurate fuel planning supports on-time performance and provides flexibility for handling unexpected events, ensuring flights can adapt to disruptions while maintaining smooth operations.

Effective fuel management is thus critical for ensuring safety, achieving cost efficiency, reducing environmental impact, and enhancing operational reliability. It’s a comprehensive approach that supports the aviation industry’s drive towards more sustainable and efficient flight operations.

Synergising Strategies for Optimal Outcomes

The integration of advanced flight planning, strategic use of buffer time, and proactive fuel management creates a powerful synergy that drives operational efficiency. These strategies, when employed together, enable airlines to navigate the complexities of modern aviation, responding dynamically to operational challenges while minimising costs and environmental impact.

This holistic approach to aviation operations underscores the industry’s adaptability and commitment to continuous improvement.

 As airlines and service providers look to the future, the principles of efficient flight planning, buffer time management, and innovative fuel strategies will remain central to achieving excellence in operations, sustainability, and customer service.

For tailored solutions that enhance your operational efficiency through expert flight planning, buffer time management, and fuel management strategies, contact us at Flightworx and discover how we can support your aviation needs and propel your operations to new heights. Let’s navigate the complexities of the aviation industry together, ensuring your success in the competitive skies.

If you are struggling with flight support or any of its complexities, feel free to contact our team today for more information.

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Aviation Guides

• What is Sustainable Aviation Fuel?
• A Short Guide to FBO’s – the Dos and Dont’s
• Current Risks to Aviation
• How Air Cargo is Revolutionising the Global Economy 
• The Cost To Operate A Private Jet
• Infrastructure For Sustainable Aviation Fuel
• Why There Is A Need To Improve Aviation Industry
• Emergency Flight Charter
• Diplomatic Flight Operations

The UK’s sustainable aviation fuel (SAF) sector is set to receive a £53 million boost from the government, aiming to reduce carbon emissions by 2.7 million tonnes annually. This investment, part of the Advanced Fuels Fund, supports projects that could generate thousands of jobs and significantly grow the economy. It aligns with the government’s net-zero commitments and the goal of achieving low-carbon flight.

This funding, announced on 17 November 2023, will support nine innovative projects, including utilising forest waste and converting power to liquid fuel. These efforts are expected to save more than 70% in greenhouse gas emissions compared to traditional jet fuel.

Transforming Waste into Wealth: Converting By-Products into Sustainable Fuels

The £135 million Advanced Fuels Fund focuses on transforming waste materials and by-products into sustainable fuels. The current projects span across the UK, from the Orkney Islands to South Wales. They include a demonstration plant for converting forestry waste and a commercial plant for power-to-liquid technology, with a combined potential to produce over 70,000 tonnes of SAF yearly.

In addition to the AFF, a sustainable aviation fuel management system can further help the industry become greener by optimising SAF usage, reducing waste, and promoting transparency. By implementing such a system, airlines, airports, and fuel suppliers can work together to maximise the environmental benefits of SAF and achieve its net-zero emissions goals and contribute to a greener future for air travel.

UK Government Invests in Central Hub and Fuel Testing to Meet Targets and Enhance Safety Standards

The UK is swiftly establishing itself as a global leader in the SAF sector, attracting investment and expertise from around the world. The government’s commitment to this field is evident in its creation of a centralised testing and approval hub, supported by £700,000 in funding. This hub will play a crucial role in streamlining the process of bringing new SAFs to market, removing barriers for international investment and fostering a vibrant SAF ecosystem in the UK.

SAF Investment Fuelling Economic Growth in the UK

The UK’s aviation sector is outstanding, directly adding over £22 billion to the GDP and generating an extra £34 billion from aerospace component exports. This industry also sparks further economic and social benefits, with international visitors spending nearly £30 billion annually in the UK.

Transport Secretary Mark Harper, during the announcement of the £53 million investment plan, emphasised the UK’s rising prominence as a leader in the Sustainable Aviation Fuel (SAF) sector, noting its potential to boost job creation and attract foreign investment.

Regarding economic impact, projections suggest that by 2030, the SAF industry could add £1.8 billion in Gross Value Added (GVA) to the UK economy, primarily through upstream activities. This contribution is expected to surge to £10.1 billion by 2050, with £1.7 billion from direct construction and the rest from the upstream value chain.

Job Creation through SAF Industry Development

New initiatives in Sustainable Aviation Fuel (SAF) are set to generate up to 10,000 green jobs by 2035 and are projected to boost the UK economy by approximately £1.8 billion annually.

The growth in green jobs and economic enhancement from the Sustainable Aviation Fuel (SAF) industry is backed by solid projections. Producing 0.6 million tonnes of SAF by 2030 could lead to the creation of 10,350 jobs, encompassing roles in operations, construction, and upstream sectors. By 2050, this figure is expected to rise to 60,000 jobs within the UK. Moreover, by focusing on decarbonising aviation, the SAF industry could help sustain an additional 210,000 aviation jobs, adapting to a carbon-constrained economy.

A World First Marks the Way

In a further demonstration of the UK’s pioneering spirit, the government has invested up to £1 million in the world’s first commercial transatlantic flight powered solely by SAF. On the 28th of November 2023, Virgin Atlantic made aviation history when one of its Boeing 787s departed from London Heathrow to JFK International Airport in New York, fuelled entirely by 100% sustainable aviation fuel (SAF).

The journey’s success represents a crucial milestone in the aviation industry’s efforts to adopt more sustainable practices, aligning with the objective of achieving net-zero emissions by 2050. The flight was powered by SAF derived from waste fats that are not suitable for the food chain, illustrating a practical solution in utilising waste products to reduce emissions and thereby aiding in the decarbonisation of the skies.

Beyond SAF: Diverse Approaches for a Greener UK Aviation Industry

SAF (Sustainable Aviation Fuel) must be integrated into a diverse strategy to reduce aviation’s carbon footprint. The four primary methods are electricity, hydrogen, bio-SAF, and Power to Liquid SAF (PtL). Each has its pros and cons, underlining SAF’s crucial role in UK aviation’s decarbonisation.

Electric aircraft, affecting mainly short-haul flights, face challenges like battery weight limitations, hindering their immediate impact.  Hydrogen’s role will expand as production and logistics improve. Current hydrogen production generates significant CO2, but advancements in green and blue hydrogen can change this. Partnerships like British Airways with ZeroAvia and Rolls-Royce with easyJet are pioneering hydrogen-fuelled flights.

Bio-SAF, derived from organic materials like waste oils and residues, offers a viable, low-weight energy source compatible with existing aircraft and infrastructure. Its production is safe and requires scaling.

Power to Liquid SAF, though more costly, avoids bio-feedstock limitations by using renewable electricity and hydrogen. It shares production technologies with bio-SAF, benefiting from cost reductions in direct air capture and green hydrogen.

A Brighter, Cleaner Sky

The UK’s commitment to sustainable aviation fuel is a testament to its dedication to environmental stewardship and its vision for a greener future. As the world’s aviation industry continues to grow, the UK stands ready to lead the way in developing and deploying sustainable solutions, ensuring that flying remains a mode of transport that does not come at the expense of our planet’s health.

With this significant investment and the establishment of world-leading SAF infrastructure, the UK is laying the foundation for a future where air travel is not just a mode of transport but a source of positive environmental impact. 

The journey towards a sustainable aviation industry is well underway, and the UK is poised to be at the forefront of this transformative movement, leaving a legacy of cleaner skies and a healthier planet for generations to come.

If you are struggling with flight support or any of its complexities, feel free to contact our team today for more information.

Aviation News

Aviation Guides

• What is Sustainable Aviation Fuel?
• A Short Guide to FBO’s – the Dos and Dont’s
• Current Risks to Aviation
• How Air Cargo is Revolutionising the Global Economy 
• The Cost To Operate A Private Jet
• Infrastructure For Sustainable Aviation Fuel
• Why There Is A Need To Improve Aviation Industry
• Emergency Flight Charter
• Diplomatic Flight Operations

Understanding What Fuel Types Are Used In The Aviation Industry

Jet A1 Fuel

Jet A1 is the most common type of jet fuel for commercial and international flights, especially in Europe and the rest of the world outside the USA.

Jet A1 aviation fuel is straw-coloured. It is based on unleaded kerosene, a clear liquid with a low viscosity.

Jet A1 fuel has a freezing point of −47 °C which means it is superior than other jet fuel types available and is suitable for flying at high altitudes and in extremely cold temperatures. In addition, Jet A1 fuel has an anti-static additive to prevent electrical discharge during refuelling which means it is considered to be one of the safest fuel types around.

Jet A Fuel

Although it has been around since the 1950s, Jet A fuel is usually only available in North America since it complies with a US standard. Toronto Pearson International Airport (CYYZ/YYZ) is one of the few airports outside of the United States where you can uplift with this fuel type.

Jet A fuel is similar to Jet A1 but with a slightly higher freezing point. The freezing point of Jet A fuel is typically around -40 °C. This is slightly higher than that of Jet A1 fuel, which has a freezing point of -47 °C.  It’s tailored for regions where extreme cold is less of a concern. Jet A fuel has an inferior open-air burn temperature of only 1,030 °C compared with 2,230 °C for Jet A1 fuel. Both fuel types must comply with ASTM specification D1655.

Jet A is a kerosene-grade aviation fuel type, offering a balance of performance and safety, particularly in terms of its high flash point, similar to the Jet A1 fuel.

Based on naphtha-kerosene, Jet B fuel was developed for improved performance in aircraft that are flying in extremely cold conditions. Aircraft ground handling operators tend to offer it in places like Northern Canada and Alaska only.

It is more volatile than both Jet A1 fuel and Jet A fuel, although this is not a serious problem when the local temperature is low. Jet B fuel has the lowest freezing point of all at −60 °C.

This fuel is a mixture of gasoline and kerosene, making it ideal for very cold environments, often utilised in military or certain civilian aircraft in cold climates.

TS1 Fuel

Only available in Russia and some other former soviet states, TS1 is a jet fuel type that complies with the Russian standard GOST 10227. In common with Jet B fuel, it is designed for use in Arctic conditions.

For this reason, it was developed to have a freezing point that is below −50 °C. Its flash point is also lower than Jet A1 and Jet A fuel at 28 °C.

TS1 is adapted to the specific requirements of Russian-made aircraft, both in civilian and military sectors.

Avgas stands for aviation gasoline although it is still sometimes referred to as aviation spirit in the UK. There are many different grades of Avgas but 1100LL is by far the most common type. 100LL (Low Lead) Avgas is an aviation petrol used in piston-engine aircraft. 

Avgas is distinguished from car petrol because it still includes a compound called tetraethyllead, an additive which is put in to help prevent engine knocking. The 100LL grade of Avgas limits the amount of tetraethyllead that may be added.

Although it still contains lead, it’s at a lower level than previous Avgas types. This aeroplane fuel type is essential for small, general aviation aircraft, providing the high-octane performance required by piston engines.

Sustainable aviation fuels (SAFs) are a promising development, offering a greener alternative to traditional fossil-based aviation fuels. Made from renewable resources like biomass, SAFs can significantly reduce aviation’s carbon footprint. They are designed to be ‘drop-in’ fuels, compatible with existing aircraft engines and refuelling infrastructure, making them a practical and eco-friendly option for the future of aviation.

In conclusion, the variety of aviation fuels reflects the diverse requirements of the aviation industry. From the widely used Jet A1 to the specialised TS1, each fuel is tailored to specific aircraft and environmental conditions. The advent of sustainable aviation fuels heralds a new era, balancing the demands of air travel with the urgent need for environmental sustainability.

Access the Flightworx Fuel Portal today and discover a world of cost-effective and efficient aviation fuel solutions!

Benefits:

• Compare fuel prices from a vast network of providers
• Secure the best deals for your flights
• Streamline your fuel procurement process
• Enjoy hassle-free fuel management
• Embrace a smarter approach to aviation fuel with Flightworx!

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Unsure about what aviation fuel is best suited for your journey or looking for a new aviation fuel supplier? Get in contact with our team today and find out how Flightworx can help you with flight planning and aviation fuel supply.

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Aviation fuel suppliers play a vital role in the aviation industry. They are responsible for providing the fuel that powers commercial and private aircraft around the world. Aviation fuel is a major cost for airlines and other aviation businesses, accounting for up to 30% of total operating expenses (Source: IATA). As a result, aviation fuel suppliers play a key role in helping airlines and other aviation businesses reduce costs.

Impact of Fuel Prices on Aviation Costs

The aviation industry is a global powerhouse, connecting people and goods across vast distances. However, this industry is also heavily reliant on fuel, making it particularly vulnerable to fluctuations in energy prices. 

As fuel prices escalate, airlines are faced with a challenging dilemma: They can either absorb the increased costs, reduce their profit margins, or pass on the additional expenses to passengers, potentially dampening demand and impacting ticket sales. This delicate balancing act between financial viability and customer satisfaction poses a significant challenge for airline management.

The implications of rising fuel prices extend beyond airlines to encompass the entire aviation ecosystem, including aircraft manufacturers, maintenance providers, and airport operators. As fuel costs rise, these businesses may face increased pressure to streamline operations, optimise resource allocation, and explore alternative energy solutions to remain competitive and resilient in the face of these economic pressures.

In addition to the direct impact on operating costs, rising fuel prices can also indirectly affect aviation businesses through various channels. For instance, higher fuel costs can contribute to increased insurance premiums, as insurers factor in the elevated risk associated with more expensive fuel-related incidents. Additionally, rising fuel prices can impact the aviation industry’s ability to invest in new technologies and infrastructure, potentially hindering innovation and slowing the pace of progress.

Impact on airlines

Rising fuel prices can force airlines to raise ticket prices, cut costs in other areas, or even ground flights. In 2008, for example, when oil prices spiked to over $140 per barrel, many airlines were forced to raise ticket prices and cut costs in order to stay profitable. Some airlines even declared bankruptcy.

Impact on private jet operators

Rising fuel prices can also have a significant impact on private jet operators. Private jet operators typically charge their customers by the hour, and so rising fuel prices can lead to higher hourly rates. This can make private jet travel less affordable for some customers.

Impact on cargo airlines

Rising fuel prices can also have a significant impact on cargo airlines. Cargo airlines typically charge their customers by the weight, and so rising fuel prices can lead to higher shipping costs. This can make cargo transportation more expensive for businesses.

How to mitigate the impact of fuel prices

Aviation businesses have a variety of options to consider to reduce the effects of fuel costs. 

These include:

• Hedging fuel prices: Airlines and other aviation businesses can hedge fuel prices by locking in prices for future deliveries. This can help to protect businesses from volatility in fuel prices.
• Improving fuel efficiency: Airlines and other aviation businesses can also improve fuel efficiency by using more fuel-efficient aircraft and by flying more efficient routes.
• Passing on costs to customers: Airlines and other aviation businesses can also pass on the cost of rising fuel prices to their customers by raising ticket prices or shipping rates. It is of paramount importance to take into account that passing on costs to customers can have a negative impact on demand. If ticket prices or shipping rates become too high, customers may choose to travel less or ship less cargo.
• Work with aviation fuel suppliers: They offer competitive fuel prices by negotiating with suppliers, pooling volumes, and using hedging strategies. They help airlines and aviation businesses with fuel costs by providing discounts, payment plans, and other financial assistance.

How Aviation Fuel Suppliers Reduce Costs

There are a number of ways that aviation fuel suppliers can help businesses reduce costs. 

These include:

• Offering competitive fuel prices: Aviation fuel providers can leverage supplier negotiations, volume pooling, and hedging techniques to deliver competitive fuel prices to their customers.
• Providing value-added services: Aviation fuel suppliers can provide value-added services such as fuel planning and routing, overflight and landing permits, and flight support services. These services can aid businesses in enhancing their efficiency and minimising their expenditure on their fuel operations.
• Eliminate the hassle of organising your own refuelling: Aviation fuel suppliers handle the entire refuelling process, from scheduling and coordination to on-site refuelling. This frees up your time to focus on other important aspects of your business.
• Expertise in fuel procurement: Aviation fuel suppliers have expertise in fuel procurement. They can help businesses negotiate the best possible fuel prices and develop fuel hedging strategies to protect themselves from price volatility.
• Receive unwavering support from a dedicated fuel team: Aviation fuel suppliers provide personalised service and support to ensure that your refuelling needs are met efficiently. They will search for the best aviation fuel price for your flight, saving you both time and money.

Flightworx: A Leading Aviation Fuel Supplier

At Flightworx, we pride ourselves on being a leading aviation fuel supplier, dedicated to helping our clients navigate the complexities of fuel management. Our flagship offering,  Fuelworx, is more than just a fuel price comparison portal. It provides free quotes from a vast network of over 100 fuel suppliers globally, enabling businesses to make informed decisions and select the most cost-effective fuel solutions.

Our expertise in fuel procurement is extensive. We actively assist businesses in negotiating the best possible fuel prices and developing robust fuel hedging strategies. This approach is crucial in protecting against the unpredictability of fuel price volatility. At Flightworx, our commitment goes beyond transactions; we focus on delivering unparalleled customer service, aiming to significantly reduce fuel costs and enhance the profitability of our clients.

Beyond Fuelworx, we offer a suite of value-added services designed to further optimise fuel efficiency and overall operational costs. These include:

• Flight Planning: We provide comprehensive flight planning services for all aircraft types, from commercial airliners to private jets and cargo planes. Our team ensures safe and efficient flight plans, considering all variables such as weather conditions, air traffic control, and airspace restrictions.
• Ground Handling: Our ground handling services extend to airports worldwide, covering essential tasks like baggage loading and unloading, aircraft fueling, and passenger services.
• Overflight and Landing Permits: Navigating the regulations of different countries can be challenging. We assist in obtaining necessary overflight and landing permits, offering advice on compliance with international regulations.
• Crew Travel: Understanding the importance of a well-rested crew, we provide comprehensive travel services, from booking flights and hotels to arranging complete travel itineraries for crew members.

Choosing Flightworx means partnering with a company that’s committed to reducing your aviation fuel costs and improving your operational efficiency. We invite you to contact us to discover more about how our services can contribute to your business’s success and cost-saving strategies.

Conclusion

Managing the impact of fuel prices is a crucial aspect of aviation business strategy. Airlines and other aviation stakeholders must continuously monitor fuel price trends, implement cost-saving measures, and explore alternative energy options to mitigate the financial burden of rising fuel costs. By proactively addressing fuel price volatility, aviation companies can enhance their long-term financial stability and ensure their continued success in a dynamic and ever-evolving industry. 

Aviation fuel suppliers play a vital role in helping airlines and other aviation businesses reduce costs and improve their profitability, especially as rising fuel prices have a significant impact on the industry.

If you are struggling with flight support or any of its complexities, feel free to contact our team today for more information.

Aviation News

Aviation Guides

• What is Sustainable Aviation Fuel?
• A Short Guide to FBO’s – the Dos and Dont’s
• Current Risks to Aviation
• How Air Cargo is Revolutionising the Global Economy 
• The Cost To Operate A Private Jet
• Infrastructure For Sustainable Aviation Fuel
• Why There Is A Need To Improve Aviation Industry
• Emergency Flight Charter
• Diplomatic Flight Operations

The jet fuel price in late June 2023 was around $2.25 per gallon. This is down significantly from the highs of over $4 per gallon seen in early 2022. The war in Ukraine sent prices rising sharply at this time. This effect has now stabilised, and prices have returned to pre-invasion levels. However, as usual throughout the past decades, the industry cannot rely on prices continuing to drop.

Oil prices peaking after the invasion

The start of the war in Ukraine caused a big rise in oil – and jet fuel – prices. This was a major setback for the aviation industry, coming just as travel volumes were seeing good recovery from the pandemic.
The invasion in early 2022 sent the price of oil to a 14-year high (according to reporting by the Financial Times) – as high as $139 per barrel. This was up hugely from just two years before. The COVID-19 pandemic sent prices falling to a historic low of under $10 per barrel in April 2020. This stabilised throughout the rest of the year at between $20 and $30 per barrel.
Jet fuel prices are, of course, closely related to crude oil prices. There can be differences due to stocks and demand for fuel, and from trading in futures contracts, but they generally move in the same way. In March 2022, jet fuel prices were averaging $3.40 per gallon, reaching a peak in June 2022 of $4.12 per gallon. Two years before, prices were down to around $0.61 per gallon.

Prices falling through 2022

The recent peak of oil and jet fuel prices came during the first months of the invasion. By the middle of 2022, prices had begun to fall, but were still up from 2021 levels. In December 2022, prices averaged $2.90 per gallon (up from $2.10 during the previous December).
More sharp rises for airlines came at the start of 2023. These were not caused by the continuing war in Ukraine (2022 showed this was stabilising), but by other factors. A dramatic rise in flight activity in China as COVID-19 restrictions were finally lifted forced demand up quickly. At the same time, outages in US refineries at the start of the year reduced supply. Prices surged in January 2023 to an average of $3.54 per gallon, but dropped back in February to $2.79.

Heading back to “normal” in 2023?

Well over a year into the war, oil and jet fuel prices are heading back down. They are not down to the lows seen during the pandemic, but the pressure is definitely easing. As of June 23th 2023, the jet fuel price was $2.25 per gallon (with a corresponding crude oil price of $73.85 per barrel). This is now back to pre-invasion prices. In January 2022, the average price was $2.45 per gallon.
The problems in Ukraine, of course, are continuing. The situation is more known, however, which will help stabilise prices. Other factors are also having an influence. Sanctions and changing relationships with Iran could boost supply. Furthermore, forecasts are that economies (and travel) will slow in the coming months which should lower demand for oil and fuel.
As we have seen many times (not just with the pandemic and the war in Ukraine, but with countless other events as well), the future direction is far from certain. An escalation or expansion of the problems in Ukraine could send prices rising, as could any number of other scenarios.

Hedging fuel prices

Volatile oil and jet fuel prices are not new – this has been happening for a long time. As such the industry has long adapted with advance purchasing and price hedging common. This provides certainty and stability for costs – very important when fuel can make up around 35% of operating cost for many companies.
Different airlines and other operators will hedge prices to a different extent, meaning not everyone is affected the same. Of course, as fuel prices decrease operators can be caught out the other way by paying prices that are too high.
There was some interesting analysis of hedging levels published by the Financial Times in early 2022 (as the Ukraine troubles began). It showed the varied position amongst major airlines.
At the top end in Europe, Ryanair was hedging 80% of its expected 2022 fuel requirement (at $65 per barrel). Lufthansa was 65% hedged, and IAG (the owner of British Airways and Iberia) was 60% hedged. At the other end of the scale, Wizz Air was not hedging prices at all, leaving it very exposed to the increases. As a result, its share price fell around 50% when fuel prices surged. Large airlines in the US have generally moved away from hedging over the years, but it still happens.

Final Thoughts

Oil, and jet fuel prices have been volatile for decades. Airlines and aircraft operators are used to this, and use hedging techniques to introduce more stability. Nevertheless, rapid rises that result from sudden events can be painful. The war in Ukraine saw the latest of these in 2022 (but with peak prices lower than the last major spikes in 2008). Prices have since dropped back from this peak with increased supply and a stable outlook. Where they go next, of course, is uncertain.

Sources:

Financial Times: https://www.ft.com/content/2bbb3a7d-00e2-4043-b85a-593eb116a9fe

Reuters (January 2023): https://www.reuters.com/business/aerospace-defense/jet-fuel-prices-up-demand-jumps-refinery-outages-limit-supply-2023-01-27/

Trading economics (crude oil prices): https://tradingeconomics.com/commodity/crude-oil

Jet fuel price – Index Mundi / US Energy Information Administration: https://www.indexmundi.com/commodities/?commodity=jet-fuel&months=60

US EIA: https://www.eia.gov/dnav/pet/hist/eer_epjk_pf4_rgc_dpgD.htm

If you are struggling with flight support or any of its complexities, feel free to contact our team today for more information.

Aviation News

Aviation Guides

• What is Sustainable Aviation Fuel?
• A Short Guide to FBO’s – the Dos and Dont’s
• Current Risks to Aviation
• How Air Cargo is Revolutionising the Global Economy 
• The Cost To Operate A Private Jet
• Infrastructure For Sustainable Aviation Fuel
• Why There Is A Need To Improve Aviation Industry
• Emergency Flight Charter
• Diplomatic Flight Operations