United Airlines Inc. is expecting fuel prices to remain at elevated levels over the long term, says the company’s CEO Scott Kirby.
Speaking to reporters in Doha, Qatar, Kirby said that United Airlines will have to foot the bill for $12 billion in fuel in 2022 considering current prices, according to Reuters. In North America, jet fuel price was at $176.13 per barrel as of June 17, data from the International Air Transport Association (IATA) showed. This is 17.2 percent higher when compared to the previous month and a whopping 125.5 percent higher compared to the same time in 2021.
As airline fleets consume large amounts of fuel, even a small change in fuel prices can significantly impact operations. For instance, a Boeing 747 quad jet uses one gallon of fuel per second, meaning that a 5-hour journey will result in the use of 18,000 gallons of fuel, Simple Flying reports.
Jet fuel prices have been affected by several factors such as the post-pandemic recovery in demand for air travel and the war between Russia and Ukraine. However, there is also another factor at play with regard to airline fuel prices.
Impact of Environmental Regulations
In 2020, the International Maritime Organization implemented a mandate for cutting down the proportion of sulfur content in the fuel used in ships.
As a result, demand for the type of crude oil that makes jet fuel and diesel increased significantly to supply the maritime market, John Kingston, editor at large at FreightWaves, told Flying Mag.
Combined with the recent sanctions against Russia, a major global oil supplier, the mandate has contributed to a drought in oil supply, thereby pushing up prices of the fuel.
In May 2022, Kirby blamed COVID-19 and rising jet fuel prices for higher airfares. In April, airfare prices rose by 18.6 percent according to a report by the Bureau of Labor Statistics.
“We’re in the recovery mode from COVID and trying to come out of what was the most devastating crisis in the history
