Airlines to spend $200 billion on fuel in 2019: report
The International Air Transport Association, IATA, in its Economic Report for 2019 said airlines fuel bill will rise to $200 billion in 2019. According to the report, the number of new destinations will increase and number of aircraft fleet worldwide will equally increase by over 1000 aircraft as there will be around 4.8 million available seats by end of the year.
According to IATA: “We forecast the airlines fuel bill will rise to $200 billion, which will represent 24.2% of average operating costs. This rise is due to the delaying effect of hedging. Jet fuel prices have fallen with oil prices and we base our forecast on an average price of $81.3/b next year(2019), and $65/b for the Brent crude oil price.
“Fuel is such a large cost that it focuses intense effort in the industry to improve fuel efficiency, through replacing fleet with new aircraft, better operations and efforts to persuade governments to remove the airspace and airport inefficiencies that waste around 5% of fuel burn each year. We forecast that fuel efficiency, in terms of capacity use i.e. per ATK, will improve by 1.5% in 2019 as deliveries of new aircraft grow and as fuel prices rise sharply.
“Airlines are expecting to continue hiring over the next twelve months, as capacity and traffic are expected to grow strongly, though the pace of expansion is slower than in 2017. We estimate that total employment by airlines will exceed 2.9 million in 2019, a gain of 2.2% compared to 2018.
“The jobs being created are not just productive for their airline employers; they are also highly productive for the economies in which they are employed. We estimate that the direct GVA for national economies, generated by the average airline employee, will rise 4.3% next year to over $104,000 a year, which is well above the economy-wide average. Additional jobs in the airline sector will raise average levels of productivity in an economy”, the report added.