A drop in US jet fuel consumption verifies what travelers have felt for months: Airlines haven’t been able to keep up with summer travel demand.
Carriers contending with labor shortages and higher fuel prices have curtailed flight capacity this summer, limiting their ability to take full advantage of surging demand for air travel. That has put a cap on fuel consumption, which last week fell to the lowest seasonal level in a year, according to government data.
Analysts had expected both jet fuel demand and flight activity “to encroach historic levels as we progressed into the summer months,” said Matt Murphy, director of energy research at Tudor Pickering Holt & Co. But consumption “has lagged our forecasts,” he said.
The largest US carriers will continue to limit flying to below pre-pandemic levels for the rest of this year as they grapple with higher fuel and labor expenses that have crimped their ability to rebound from a collapse in travel early in the pandemic.
Yet that hasn’t stopped refiners from pumping out more of the fuel on expectations that consumption will pick up. Marathon Petroleum Corp., the country’s largest fuelmaker, said this week demand for its jet fuel was up nearly 20% in the second quarter from last year, with the rest of the year appearing bullish. The second largest US refiner, Valero, is maximizing jet fuel production at the expense of diesel.