Topic
The wholesale market for aviation turbine fuel, tracked through daily price indexes, and usually an airline's largest or second-largest operating cost.
Korean Air and Asiana will apply level 27 fuel surcharges in November, four tiers above October, after average Singapore jet fuel rose 9.7%. Year-end travellers pay the difference, and the carriers' risk is whether bookings hold at the higher price.
Reality
Delta cut its full-year profit outlook 24% at the midpoint, to $5.10-$5.60 a share, in a quarter when jet fuel cost it $1.6 billion more. CEO Ed Bastian says fares can stay high once oil eases, though Fortune notes they have not fully covered the fuel bill.
Reality
Delta Air Lines cut its full-year earnings forecast to $5.10-$5.60 a share from $6.50-$7.50 after its third-quarter fuel bill rose 62% to $4.1 billion. With fares already up about a quarter and seat growth speeding up, rivals have less room to pass on the next fuel increase.
Reality
United, Southwest and American told Morgan Stanley's Laguna Conference that high fuel means fewer flights and higher fares this winter. Their own CFOs say fuel reaches fares with a lag, so the increase lands on first-quarter bookings.
Reality
Jet fuel is 83% above its pre-war price and Avelo's chief executive says carriers will have to pass that on. A Q4 travel line sized on last autumn's $290 average domestic seat is now short by about a third.
Reality