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The impact of high oil prices continues combustible for the airline industry affecting growth and mainly, to passengers with more expensive air tickets.
Within the framework of the 82nd Annual General Assembly of THERE IT IS on Rio de Janeiro, One of the topics that has dominated the agenda is the complex situation that the sector is going through due to the volatility of fuel prices. The figures presented by the association leave no room for doubt: We are facing a global fuel crisis that is straining the financial structure of the entire industry.
An unsustainable burden on operating costs
Jet fuel represents today among the 30% and the 40% of total airline costs. The data presented, with Platts S fonts&P Global Energy, show a price trend that, after periods of relative stability, has experienced significant increases, directly impacting the ability of companies to operate efficiently.
The global map shared in the presentation highlights an undeniable reality: airlines face external shocks that they did not create, but that drastically condition its operation.
The crisis is not limited only to the income statements of companies; the impact is systemic and reaches the end user. THERE IT IS has clearly outlined how this pressure affects the two pillars of air transport:
For the airlines:
- Sharp increase in operating costs.
- Reduction in planning capacity, investment in new fleets and long-term growth.
- Decrease in connectivity on strategic routes.
for the passengers:
- Cost shifting through higher airfares.
- Loss of access to air links that become economically unviable.
- A general reduction in economic competitiveness linked to air mobility.
A call for regulatory prudence
The message from the summit in Rio is a wake-up call to regulators and governments: «Political decisions should not make the situation worse». In a context where the industry is trying to consolidate its recovery after difficult years, Airlines' financial sustainability is key to maintaining global connectivity, trade and economic dynamism.
The question that remains posed for this event is how to balance the need for decarbonization—with the necessary deployment of sustainable aviation fuels (PURE)— and the current economic reality, without sacrificing the viability of a sector that is the engine of the world economy.
Since the 82nd AGM of THERE IT IS, We will continue to report how this critical debate evolves for the future of our industry..
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