Forecasting jet fuel remains a complex and uncertain endeavour. Oil constitutes anywhere between 20% and 30% of an airline’s cost base and fluctuations in price can affect profitability in any given period.
Fuel costs represent one of the biggest expenses for the aerospace and airline industries and have a substantial impact on all elements of travel. Fluctuating prices can effect capacity decisions, including aircraft retirement, route planning, pricing, and staff hiring. FCM partnered with 4th Dimension Business Travel Consulting (4D) to provide procurement managers and business leaders a greater understanding of these fluctuations, giving further insight into the airline market.
With environmental sustainability gaining momentum, the report also investigates the development and use of biofuel to reduce carrier’s carbon footprint. The overview also includes Air New Zealand and Virgin Australia's recent joint request for information (RFI) to the market to investigate options for locally produced aviation biofuel.