Airfares Expected to Rise Up to 25% Due to Jet Fuel Costs
A new report by McKinsey suggests that airfares could increase by up to 25% as a result of surging jet fuel costs. The report indicates that the jet fuel crack spread may exceed $50, contributing to the fare hike.
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Airfares could rise by up to 25% as jet fuel costs surge, says McKinsey
Global jet fuel supplies are facing significant pressure due to geopolitical events and refinery limitations, according to McKinsey. This is driving up costs for airlines, with potential airfare hikes of 20-25% expected as fuel prices surge. Inventories remain low, and key exporting regions are restricting shipments, creating a challenging outlook for the summer travel season.
By TOI BUSINESS DESK
Read full article →Airfares May Rise 25% As Jet Fuel Crack Spread May Cross $50: Report
This second factor is reflected in the jet fuel "crack spread"--a measure of the difference in price between crude oil and the fuel products that are refined from it, the report said.
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