Airlines Benefit From Drop In Jet-A Refining Costs | Aero-News Network
Aero-News Network
RSS icon RSS feed
podcast icon MP3 podcast
Subscribe Aero-News e-mail Newsletter Subscribe

Airborne Unlimited -- Recent Daily Episodes

Episode Date

Monday

Tuesday

Wednesday

Thursday

Friday

Airborne On ANN

Airborne 08.31.15

Airborne 09.01.15

Airborne 09.02.15

Airborne 08.27.15

Airborne 08.28.15

Airborne Hi-Def On YouTube

Airborne 08.31.15

Airborne 09.01.15

Airborne 09.02.15

Airborne 08.27.15

Airborne 08.28.15

EAA/ANN AirVenture Innovation Preview

AIP-#1 Vimeo

AIP-#2 Vimeo

AIP-Part 1 YouTube

AIP-Part 2 YouTube

Tue, Mar 17, 2009

Airlines Benefit From Drop In Jet-A Refining Costs

"We'll Enjoy It While We Have It"

The recession has been almost uniformly bad news for airlines, but the industry has found one silver lining -- Jet-A fuel is piling up at refineries, causing its price to plummet.

The Fort Worth Star-Telegram reports the cost of refining jet fuel has fallen from about $25.50 per barrel of crude oil a year ago, to an average of $21 in January and $15 in February. One week ago Tuesday, it stood at just $4 a barrel.

For airlines which hedged too much of their 2009 fuel needs at prices which now seem high, the drop in what's called the "crack spread," or the costs of refining, are especially good news. The hedge contracts lock in the cost of the oil per barrel, but not the refining costs. John Heimlich, chief economist for the Air Transport Association, calls the savings for airlines, "significant."

He says refiners who shifted production capacity to jet fuel as auto gasoline consumption declined have now created a glut. "There is a time lag in terms of how quickly they can shift their refining, so you still have a lot of excess inventory," Heimlich said.

A one-dollar drop in refining costs saves the industry an estimated $400 million a year.

But, noting the crack spread rose suddenly to $60 per barrel after Hurricane Katrina, Heimlich is cautious in his optimism. "We’ll enjoy it while we have it, and take every penny we can get."

FMI: www.airlines.org

Advertisement

More News

AeroSports Update: Rob Holland Wins The Gold

It Was A Big Day For The U.S. National Aerobatic Team As Rob Holland Takes The Gold In The Four Minute Free Program On August 29 It’s been reported on the International Aerob>[...]

ANN's Daily Aero-Linx (09.02.15)

FAA NAS Systems Engineering Portal (SEP) This site renames the NAS Enterprise Architecture Portal and acknowledges a more robust systems engineering and planning perspective along >[...]

ANN's Daily Aero-Term (09.02.15): Landing Gear Extend Speed

The maximum speed an aircraft can be safely flown while the landing gear is extended.>[...]

Aero-News: Quote Of The Day (09.02.15)

"Business Aviation’s global CO2 emissions are very small, being approximately 2 percent of all aviation and .04 percent of global man-made carbon emissions." Source: Excerpt >[...]

Passengers Brawl On JetBlue Flight

Razor, Pepper Spray Used In Conflict Between Two Women On Board Two women on board a JetBlue flight from Kingston, Jamaica to JFK airport in New York got into a brawl as the flight>[...]

blog comments powered by Disqus



Advertisement

Advertisement

Podcasts

Advertisement

© 2007 - 2015 Web Development & Design by Pauli Systems, LC