New McKinsey & Co research suggests that fuel price hikes are putting airlines under strain— but may prompt airlines to limit overcapacity, leading to better returns and industry stability.
Since the start of 2022, the price of jet fuel has risen by around 90 percent—and costs roughly 120% more, on average, than it did in 2021.
Counterintuitively, high fuel prices might not necessarily be a bad thing for the industry as a whole. This article outlines what airlines have done in the past when fuel prices were high—and offers strategies that airlines could consider to mitigate the effects of fuel price hikes.
Notable discussion points include:
- What the current landscape of steeply rising energy costs means for airlines
- Three reasons why high jet fuel prices may not be as bad for airlines as expected
- How airlines can remain profitable in times of high and low fuel prices
Read the full article https://www.mckinsey.com/industries/travel-logistics-and-infrastructure/our-insights/why-rising-fuel-prices-might-not-be-as-bad-for-the-airline-sector-as-it-seems
