In the 12 months since the last NBAA convention, most indicators show that business aviation flight hours dropped as aircraft operators and flight departments were squeezed between a shaky economy and unstable fuel prices. Those two factors resulted in reduced demand for jet fuel.
Airbus COO for customers John Leahy often points to a coming wave of airplane retirements when questioned about airlines’ appetite for new equipment, even during a time of severely slumping traffic and mounting industry losses.
Oil prices have slid back since reaching a peak of $145 a barrel in July, resulting in jet-A prices finally falling by a significant amount. Although they remain sharply higher compared to this time last year, retail jet-A prices at U.S. FBOs have dropped in many cases below $6 per gallon. And while some FBOs at major U.S.
It’s true, the price of jet-A has risen steeper than a max-power climb gradient. But the cost of many other business aviation staples has remained relatively stable, and in some cases nosed over in the past five years. Even fuel prices have come down somewhat in recent weeks. These are among the findings of a comparative survey of business aviation costs and operational data compiled by NBAA Convention News.
As oil soared to nearly $147 a barrel this summer, U.S. airlines began tacking fuel surcharges onto the prices of their tickets. The commercial carriers also began charging for previously free items, such as a second (and in some cases, a first) checked bag, blankets and drinks.
In a curious illustration of how current events make strange bedfellows, the Air Transport Association of America (ATA) has joined Aircraft Owners and Pilots Association (AOPA) and NBAA to fight what they perceive to be causes of record-high oil prices. The two associations are members of the newly formed Stop Oil Speculation Now (S.O.S. Now) campaign, which includes airlines, trucking companies and travel associations. S.O.S.
There is no short-term fix for the high price of oil, concluded panelists at the Air Service Energy Summit, held on July 10 in Washington, D.C.
In just one year, the price paid at the refinery for jet-A in the U.S. has climbed 92.7 percent, reaching the $4-per-gallon mark early last month. The refinery price is a good place to start looking at fuel prices because it roughly equates to the cost of jet-A paid by FBOs before various fees, taxes and markups are added to decide the retail price.
“The fundamentals don’t support the price of oil,” Hiller Group national sales manager Wesley Earl told attendees of the Florida Aviation Trade Association annual meeting on Tuesday. Tampa, Fla.-based Hiller Group is a fuel distributor that provides Chevron and Texaco branded fuel to more than 350 FBOs. Factors inflating fuel prices include the dwindling number of refineries (especially for jet-A), geopolitical issues, lack of a U.S.
Energy companies’ experience of the early-1990s Gulf War suggests that any sudden increase in oil prices owing to a new Iraq conflict might be brief, since the market has become much more responsive to demand. However, current oil supplies are plentiful, according to a petroleum industry senior executive.