BAKU, Azerbaijan, Jan.11
By Leman Zeynalova – Trend:
Short-haul flights won’t return jet fuel consumption to pre-pandemic levels until 2025, Trend reports with reference to Fitch Solutions.
“We continue to hold our forecast for annual average Brent prices at USD72/bbl for 2022 which will mean a limited growth of just 1.5% y-o-y. We anticipate markets will revert to oversupply through the year as production increases from OPEC+ and non-OPEC producers overwhelm the slowing growth in fuel demand. The aviation sector will continue to post higher passenger numbers and increased number of flights however, increased flight capacity and short-haul flights will fail to fully return jet fuel consumption to pre-pandemic levels until 2025, according to our latest forecast,” said the company.
Fitch Solutions says in its report that the full return in consumption will likely only occur once long-haul flights are resumed in earnest, in response to increased passenger demand.
“Although pent-up demand is likely to increase holiday air travel, we expect the declines in international business travel to be substantial in the coming years. It remains unclear if this key segment of long-haul air travelers will return in similar numbers to pre-Covid times, adding further uncertainty to long-term trends. For now, the best predictor of long-term global jet fuel prices is the movement in the price of oil, which we have trending meekly higher over the coming years,” the report reads.
The analysts of Fitch Solutions note that balance of risk for jet fuel prices lie to the upside as the worst of global declines in air travel has passed and a wider roll out of vaccinations spurs reduced travel restrictions and a return of travel for leisure.
“Any rise of future variants in the vain of the latest Delta and Omicron variants will likely see diminishing impacts as the appetite for renewed restrictions is limited and medical interventions have improved effective at limiting the mortality and severity of infections,” the report says.
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