Jet fuel price rises are putting pressure on airlines as they cope with suppressed demand caused by the omicron variant of COVID-19, according to a new report from the International Air Transport Association.
The IATA has warned the rise in fuel to its highest level since late-2018 could threaten the airline industry’s recovery, which is also managing a revenue hit thanks to pandemic-related flight cancellations.
The concerns come after financial results from Q3 of 2021 showed an easing of the pressure on profits, with a sample of 87 airlines showing the operating loss improved from 13.6 percent of revenues in Q2 to 2.6 percent in the next quarter.
Additionally, the global airline share price index started the year 2022 on a positive note, rising by 5.8 percent in the first half of January.
The report said: “The improvement was driven by investors’ confidence that the new omicron variant will lead to fewer hospitalizations than other strains and therefore might cause less disruption than previously expected.”