US airlines recovery on hold, jet fuel demand shrinks

US airlines are forecasting a fourth year dip in jet fuel consumption with passenger travel down 5 per cent in January year on year, and cargo tonnage faring worse with domestic and international movement down by 25 per cent in the same period according to the US Energy Information Administration (EIA).FAXTEXT = John Heimlich, chief economist for the ATA said on the economy's affect on shippers including leading carriers of FedEx and UPS: Demand for air travel and air cargo, especially time-sensitive shipments, is down sharply in all regions in which US carriers operate.

Jet-fuel demand for the US is predicted to drop to 1.43 million barrels per day this year compared to 1.52 mmbpd in 2008, lower still than two years ago but last year's drop is attributed to decommissioning of older and less fuel efficient planes.

Slide in jet-fuel demand impacts business travel and international business to business exhibitions such as Las Vegas' high profile wireless electronic show which is anticipating a 15 per cent drop in footfall, reported Reuters. Tom Parsons, CEO of Bestfares.com, a discount travel website said in both the corporate and personal world the mood is, 'Let's stay home and balance our budget.'

Michael Morris, a short-term energy forecaster with the EIA spoke of recovery in the economy reviving the flagging transport sector. This would be very favourable for jet fuel demand. But not till late this year or early next.

Source: Schednet