The Scheduled Airlines Association, an industry association of airlines, issued an emergency statement on April 3, 2011, titled “Aviation Fuel Prices Rising Against the Backdrop of the Situation in Iran and the Middle East.
He commented that although the government’s drastic reduction measures (see below) have been applied, “the environment surrounding aviation fuels (kerosene) is facing higher prices than those (gasoline and diesel fuel).
Specifically, he noted that while the price of crude oil has increased about 1.8 times in the past month, the price of aviation fuel has increased by about 2.5 times, and that the price difference between crude oil and aviation fuel has increased up to about five times compared to the end of February due to contingency military use and buying up by other countries.
In response to these effects, foreign airlines have raised fuel surcharges twice in one month and raised fares by up to 20%, but the current extraordinary price hikes are far beyond the limits and speed of fluctuation set by Japan’s fuel surcharge system.
In addition, there are few cases of fuel surcharges being introduced on domestic routes in the first place, and “fuel hedging,” which secures the conventional amount used at a fixed price, is merely a method of equalizing prices, so “we are concerned that if the current abnormal price hikes are prolonged, there will be various effects on our network maintenance. The company is appealing to the public.
According to estimates based on current public support and hedging measures, the entire Japanese airline industry could be burdened with an annual increase of several hundred billion yen or more.
The statement released this time concludes, “It is necessary to take various measures to protect Japan’s skies from unprecedented price hikes and to connect the network to the next generation,” and appeals for understanding and cooperation to maintain the network, especially on demanding regional routes.
In addition, under the “Urgent Dramatic Mitigation Measures in Light of the Situation in Iran” by the Agency for Natural Resources and Energy of the Ministry of Economy, Trade and Industry, the subsidy amount for aircraft fuel was revised effective for shipments on March 19. Previously, the subsidy was reduced by a fixed amount of 4 yen per liter, but now the subsidy is equivalent to 40% of the subsidized amount of gasoline, and the unit price paid is 19.9 yen per liter as of April 2, 2012.
© Source travel watch