By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Travel Radar - Aviation NewsTravel Radar - Aviation News
  • Breaking News
  • Aviation
    • Aircraft
    • Airlines
    • Airshow & Events
    • Careers
    • Manufacturing
  • Travel
    • Airports
    • Points & Loyalty
    • Technology
    • Trip Reviews
  • Newsletters
Reading: How Will The Rise In Gas And Electricity Prices Affect The Aviation Industry?
Share
Sign In
Notification Show More
Font ResizerAa
Font ResizerAa
Travel Radar - Aviation NewsTravel Radar - Aviation News
  • Breaking News
  • Aviation
    • Aircraft
    • Airlines
    • Airshow & Events
    • Careers
    • Manufacturing
  • Travel
    • Airports
    • Points & Loyalty
    • Technology
    • Trip Reviews
  • Newsletters
Signin Sign In
Follow US
Copyright © Travel Radar Media Ltd. 2025 | All Rights Reserved
Travel Radar - Aviation News > News > How Will The Rise In Gas And Electricity Prices Affect The Aviation Industry?

How Will The Rise In Gas And Electricity Prices Affect The Aviation Industry?

Amuthan Chandrarajan
Last updated: 10 February 2022 09:12
By Amuthan Chandrarajan
5 Min Read
Share
EZY A320 moments after taking off. @ Marco Macca / Travel Radar
EZY A320 moments after taking off. @ Marco Macca / Travel Radar
SHARE

Gas and electricity bills in the UK will be going up in April this year. According to the BBC, the average household gas and electricity bill will go up by £693. In April there will be a 54% increase in price when compared to last year. The government will only help cover part of the cost. So why is this happening? And how does this affect the aviation industry?

Why has the price of gas gone up?

A worldwide squeeze on energy supplies has pushed to price of gas up to high levels. According to the BBC a cold winter in Europe 2020/21 put pressure on supplies and therefore reduced the amount of gas that was kept and stored. In addition, the summer of 2021 was less windy which made it difficult to generate wind energy and therefore put more pressure on fossil fuels. Furthermore, increased demand for gas from Asia and in particular China, put pressure on liquified natural gas supplies.

The reason all of the above causes problems for the aviation industry is because it is also affected by the worldwide squeeze in energy supplies as this would also affect the price of oil. In addition, gas generates a third of the UK’s electricity supply so as gas becomes more expensive there will be more pressure to use other fossil fuels to satisfy demand, again pushing up oil prices.

American B777
In the US airlines have already had to deal with a hike in oil prices in 2021 © Andrea Ongaro/Travel Radar

In the US, airlines have already had to deal with a hike in oil prices in 2021 due to freezing weather increasing demand. At the same time supply was reduced due to the fact that the cold weather also affected oil production in Canada, North Dakota, Oklahoma, Texas and elsewhere. Thus there was an increase in demand for oil, but a reduced supply significantly affecting oil prices.

How will the Aviation Industry Respond?

Increases in jet fuel prices are not easy for airlines to deal with in Covid times when demand for flights is low. This reduced demand means that they may also find it hard to increase prices due to the fact that this may result in even lower demand for flights. Up till last year, jet fuel prices were lower because Covid restrictions meant that demand for air travel was less so fewer planes were flying. However, since last year prices started rising in the US due to the freezing weather as discussed. Thankfully this rise was still minimised because flying is still lower now due to Covid. This meant that the increase in jet fuel prices was less than it would have been otherwise.

Spirit Airbus c Aibus
Spirit Airlines faced higher costs in 2021 © Airbus

 

According to CNBC, the US airline carrier Spirit Airlines CFO Scott Haralson is cited as saying that higher fuel costs would be among the discount airlines first quarter challenges. He said this on February 11 2021. It may be that European discount airlines such as EasyJet may face the same difficulty this year due to increasing prices.

Jet fuel prices are one of an airlines biggest expenses along with labour. In the US, labour costs are supported by billions in federal aid. This will no doubt help soften the blow of more expensive fuel. Perhaps the British government may have to increase furlough payments to airline companies in order to help them during this difficult time.

As one can see, airlines will find it more difficult to deal with increased fuel charges at a time when they are already struggling due to Covid. This is more likely to affect discount carriers who have customers that are more likely to be affected by an increase in price. Perhaps government help will be needed. However, it does appear that due to continued lower demand for flights, jet fuel price increases will be minimised. So therefore, airlines have less to worry about now and will have time to plan for what happens if prices increase further. Perhaps using more fuel efficient planes and greener technologies may also help.

You Might Also Like

Ryanair Heavily Criticises New Hungarian Windfall Tax That Impacts Airlines
Embraer Embarks on Onsite Solar Energy Generation Projects
Airbus launches app to track bookings and travel restrictions
Fokker Services Asia Appointed as an Embraer Authorised Service Centre
Aviation Schools Around the World: Where to Start Your Career in the Skies
Share This Article
Facebook Twitter Email Copy Link
What’s your thoughts?
Love0
Sad0
Happy0
Angry0
Amuthan Chandrarajan
ByAmuthan Chandrarajan
Aviation Reporter - Amuthan has a background in residential and commercial real estate. He also has a keen interest in aviation and travel and has visited many countries. Amuthan has a sound knowledge of business and finance.  He has gained a Master of Business Administration and has become a Chartered Management Accountant. 
Previous Article Spirit Airbus A320 Frontier and Spirit Set to Merge and What it Means for Travellers
Next Article Kangaroo route bounces back: British Airways to resume London-Sydney flights
Subscribe
Login
Notify of
guest

guest

0 Comments
Oldest
Newest Upvoted
Inline Feedbacks
View all comments

Stay Connected

FacebookLike
TwitterFollow
InstagramFollow
YoutubeSubscribe

Trending News

Airbus A321 Air Astana P4-OAS
Air Astana to Expand Network in the Middle East and Asia
Airlines Aviation Route Development
Emrecan Ergin, Vice President, Middle East and Africa at PPG Group
Plaza Premium Group Appoints the New Vice President, Emrecan Ergin
Airports Aviation Careers
EasyJet aircraft
easyJet Launch Five-Star Luxury Holiday Package Collection
Airlines Aviation Route Development Travel
BA CityFlyer Embraer
British Airways Announces Transatlantic Expansion With New Direct U.S Flight
Aircraft Aviation Travel
A LEGO figure next to a Billund Airport and Norwegian signboard.
Norwegian Announces New Billund – Edinburgh Route
Airlines Aviation Route Development
//

Travel Radar is the leading digital hub for all things aviation and air-travel. Discover our latest aviation news, aviation data, insight and analysis.

Discover

  • Latest News
  • Subscribe
  • Weekly Digest
  • Contact Us
  • Privacy Policy
  • About Us
  • Advertising
  • Media Coverage
  • Press & Events
  • Join Our Team
  • Our Brands

Signup to our Newsletter!

And get the latest aviation news via our weekly news digest!

© Travel Radar Media Ltd. 2015-2025 | ISSN #2635-0696 | Trademark #UK00003579704
wpDiscuz
adbanner
Welcome to the TR Community!

Sign in to your account

Not a member? Sign Up