Jet Fuel Demand Poised For A 30% Surge During Summer
Jet Fuel Demand Poised For A 30% Surge During Summer
The air travel industry is at a critical inflection point. Steady vaccination rollouts and falling infection rates in most Western economies are allowing commercial travel to resume after more than a year of downtime. Rebooked holiday trips, postponed family reunions, meeting newborn kids, weddings, attending memorial services for loved ones are the new norm-- All that pent-up travel demand is expected to trigger a 30% surge in jet fuel demand during the summer compared to first quarter levels.
Yet, jet fuel remains one of the biggest weak links in the bullish oil thesis, with a full recovery of aviation fuel demand to pre-pandemic levels not expected to arrive until 2023.
According to the International Energy Agency (IEA) summer air travel activity will mainly be dominated by short-haul flights, which are expected to account for almost two-thirds of the total fuel used by the sector. Unfortunately, this category of flight, on average, uses ~35x less fuel than long-haul flights.