Jet Fuel Pricing Transparency Helps Aviation Industry Stay on Track

by Ruth Seeley

The impact of aviation fuel prices is a huge factor in airline growth and profitability. With aviation fuel prices tied to the price of oil, rising fuel costs have a “double whammy” effect: operation costs increase, and higher oil prices play a role in economic recessions. That means airlines find themselves paying more for fuel to transport fewer passengers per flight.

S&P Global Platts recently celebrated its 15-year anniversary of working with the International Air Transport Association (IATA) to increase jet fuel pricing transparency.

The Platts Jet Fuel Price Monitor is freely available on the IATA web site. The Global Jet Fuel index and price data shows the weighted average of jet fuel prices across major global trading, supply and demand centers,

Platts provides spot market benchmark price assessments in relevant regional centers. Under the methodology, each regional Platts assessment is given a proportional weighting that captures the relative demand for jet fuel in the region. The global index is created by averaging these regional indexes, weighted by the proportion of world demand for the product captured in each region. In addition to global and regional jet fuel Price Indexes, which reflect current world prices, Platts also publishes global and regional Relative Value Indexes, which express the value of the index in relation to jet fuel prices in the year 2000.

Vera Blei, Head of Oil Markets, S&P Global Platts, said, “Jet fuel buyers have seen stronger prices since the start of the year in line with crude values, which are up due to OPEC+ limits, and international trade tensions. Added to this, airlines will soon face the challenges from the International Maritime Organization’s stricter cap on sulphurous emissions at sea from 2020, which will put pressure on the middle distillate complex, where much of the new compliant fuels will likely come from.”

Source:  S&P Global Platts

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