Aviation fuel remains more expensive than before the war

In March, the price of Jet A1 aviation kerosene more than doubled to around 20 kronor per litre. Prices vary locally and often depend on previously agreed contracts. Airlines are quick to adjust ticket prices upwards as fuel costs account for 25 - 30 percent of the price.

Companies that have been careless with fuel price hedging, such as SAS, tend to reduce the number of flights to fill planes more fully. Others who have hedged properly, like Norwegian, instead increase the number of routes to gain market share.

The US and Israel's attack on Iran broke an upward trend for aviation. IATA's figures for February have just been calculated and show strong growth measured as revenue passenger kilometres (RPK) compared to the same month the previous year:

Flying grew the most in Latin America with an increase of 13.5 percent, followed by Asia which increased by 8.6 percent. Europe, North America, the Middle East, and Africa all landed around a 5 percent increase.

Exactly how the war has affected aviation globally is being calculated by IATA's statisticians. Director General Willie Walsh says:

- Some things we already know. Fuel prices have skyrocketed and with the airlines' thin margins, ticket prices are increasing. Total capacity is being adjusted, not least in the Middle East. The forecast for March has been lowered from a 5 to a 3 percent increase.

After the ceasefire, optimism in the industry naturally rises, but Willie Walsh warns in an interview with Reuters:

- Even if the Strait of Hormuz remains open, it will take months before the supply of aviation fuel recovers. The disruptions in refining capacity in the Middle East mean that the cost of fuel will be higher than before the war, even if the price is now expected to fall.