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Thu, Dec 18, 2008

Report: Jet Fuel Prices Lowest Since 1991

Capacity Cuts Have 'Fueled' Supply Glut

Recent capacity cuts by airlines have done more than increase ticket prices. Another result of fewer planes in the air is a growing glut of jet fuel on the market, and falling fuel prices as a result.

And the capacity cutting hasn't ended. The Houston Chronicle reports that even Southwest Airlines, which had outlined a strategy to expand in markets where competitors planned cuts, has cut 32 round trips and added 19 new ones, for a net decrease of 13, starting in May.

US air travel in November was the lowest since 9/11. American Airlines, United and Continental estimate traffic is down 10 percent, exceeding cuts in capacity.

The US Energy Department says jet fuel demand for the four weeks ending December 5 was down 17 percent from the same period last year.

FMI: www.opec.org

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