"Returning to normality takes time" - IATA head speaks on the future of global civil aviation
The head of a body representing global airlines warned on Wednesday that it would take months for jet fuel supplies to recover even if Iran reopens the Strait of Hormuz, given disruptions to refining capacity in the Middle East.
Fuel is the second largest expense for air carriers after labor, typically accounting for about 27% of operating costs, according to the International Air Transport Association (IATA).
Iran's closure of the Strait of Hormuz, as part of retaliatory actions in the war, has disrupted global jet fuel supplies, while news of a ceasefire and the possibility of safe passage through Hormuz has sent airline stocks soaring.
Willie Walsh, director general of IATA, told reporters in Singapore that, while he expected crude oil prices to fall, jet fuel costs could remain high due to the impact on refineries.
"If the Strait of Hormuz were to reopen and remain open, I think it would still take a few months to get back to the level where supply should be, given the disruption of refining capacity in the Middle East," Walsh said. He shrugged off comparisons to the COVID-19 pandemic, which has devastated global travel.
"This is not like COVID. This is not a crisis at all like what we experienced (in COVID)," he said. "In COVID, capacity was reduced by 95% because the borders were closed. We are nowhere near that."
The situation was more comparable to other shocks, such as the 2008-09 downturns or the aftermath of the 9/11 attacks, he added. "After 9/11, the recovery took about four months. In 2008-09 it was probably 10 to 12 months," he said.
Jet fuel prices normally move in line with oil prices, but they have more than doubled since the conflict with Iran, far outpacing a 50% increase in crude oil prices before news of the two-week ceasefire.
Two-week US-Iran truce reached/Global oil prices immediately fell below 100 USD/barrel
The United States and Iran agreed to a two-week ceasefire just an hour before President Donald Trump's deadline for Iran to capitulate expired. Trump backed......
Demand for electric motorcycles increases - Unstoppable oil price hike "booms" Chinese factories
Chinese electric motorcycles are gaining popularity in overseas markets due to rising international oil prices driven by geopolitical conflicts. An electric......
Preparations for tourism, Prime Minister Rama inspects projects in the Municipality of Lezha
Prime Minister Edi Rama has shared on social media a video with footage from an inspection of two projects that have been and are being implemented in the......
Revitalization of the towers in the north: Ownership challenge, Gonxha: Tourism an economic asset of the northern areas
The Minister of Tourism, Culture and Sports, Blendi Gonxhja, presented one of the main projects for the preservation and promotion of cultural heritage in......
Ministers Malaj and Salla meet with livestock farmers: Increase funds and strengthen food safety controls
The Minister of Agriculture and Rural Development, Andis Salla, together with the Minister of Finance, Petrit Malaj, hosted today at a meeting at the......
"Oil in agriculture is covered through a 10% refund" - Deputy Minister of Agriculture, Guri: It is among the main inputs, broader protection
Farmers will be supported this year for the purchase of agricultural inputs in order to reduce their costs and increase production. Deputy Minister of......
"The aim is to recruit the best" - Prime Minister Rama presents the platform for job vacancies in the public sector
The government has introduced the new platform puna.gov.al where young people can apply to become part of the Public Administration. Prime Minister Edi Rama,......
Malaj: Formalization and declaration of real wages, fundamental for economic development and social security of employees
The Minister of Finance, Petrit Malaj, held a meeting with representatives of entities operating in the construction sector in Shëngjin, Lezha, accompanied......
