July 8. Airlines are emerging from the pandemic only to face more turbulence. Headwinds from high fuel prices, labor shortages and a fragile economic situation are complicating the recovery, which is now well under way. Pent-up travel demand has sparked a boom in air travel this summer, transforming jet fuel from the laggard to the fastest-growing refined product. Jet fuel demand is expected to post a 15% gain this year to 6.5 million barrels per day, according to latest Energy Intelligence assessments. A similar rise in 2023 should bring it close to peak 2019 levels of 7.9 million b/d. This year’s rebound would put jet fuel demand in the Americas just 7% below 2019 levels, with Europe showing a 15% shortfall. Asia is the furthest behind with regional demand expected to reach 75% of 2019 rates this year, our figures show.
All of this year’s gain comes from OECD countries, where fuel usage shows a 36% rebound. US jet fuel markets have restored 90% of their pre-Covid-19 size as demand approaches 1.6 million b/d. Planned capacity expansion in the US and Europe that would have lifted demand even further have been reined in by labor shortages across all segments of the business. European jet demand is projected to jump by 70% from 2021 to reach 1.2 million b/d this year after dropping to less than 200,000 b/d at the start of the pandemic. Regional air traffic was back to 86% of pre-pandemic levels in late June, according to network manager Eurocontrol, but has fallen to 84% with the cancellation of flights at UK airports, Amsterdam’s Schiphol and Charles de Gaulle in Paris, where strike action disrupted operations. The number of flights is still creeping up for the summer season, while rerouting to avoid Russian airspace has added to fuel use.
Source: Energy Intelligence