Fueling Problems Surface Ahead of Aviation Restart

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Airlines and their jet fuel suppliers are meeting virtually this week to plan for the safe restart of global air travel after more than 15 months of Covid-19 devastation. High on the agenda at the Jun. 8-10 International Air Transport Association’s (IATA) Aviation Fuel Forum are possible problems with jet fuel quality caused by stagnant fuel tanks and unused pipeline and airport hydrant infrastructure. But labor shortages, an exodus of talent from the industry and problems accessing multi-fuel pipelines -- where nominations are based on historical use -- were also flagged as impediments likely to hamper restart efforts. IATA formed its Fuel Restart Coordination Group soon after Covid-19 grounded the airline industry last March. But it has already had to throw away the initial restart plans it published last August. Developed by representatives from airlines, fueling companies and oil company suppliers in each region, those plans optimistically assumed a linear recovery in global air travel that has simply not played out as hoped. US Market Takes Off Speakers from the US described an already booming domestic travel market but also acute problems getting fuel because of a shortage of truck drivers and "into-wing" airport fueling personnel. Michael AuBuchon, senior director of fuel supply chain management at US domestic carrier Southwest Airlines, said his company's jet fuel demand was already above pre-pandemic levels thanks to the rapid rollout of vaccines in the US. Southwest has added 20% more leisure routes since it restarted operations, mainly to smaller US airports close to mountain and beach resorts that are dependent on deliveries of jet fuel by truck. United Airlines' vice president of global fuel supply, Janet Peters, flagged similar problems around truck supplies to the smaller US airports it serves but also mentioned problems with pipeline deliveries to its larger hubs. The resilience of US demand for road fuels over the last year has meant that gasoline and diesel nominations have already squeezed jet fuel out of pipeline delivery schedules at a time when airlines like United are hoping to add routes to Europe this summer. Jet suppliers need plenty of advance notice to get certified fuel in the right place. And many larger airlines are struggling to provide that notice given the uncertainties surrounding international travel. Europe Slow to Ascend Willie Walsh, IATA's new director general and the former CEO of European airline giant IAG, said the crisis facing aviation is no longer caused by Covid-19 but by government restrictions. IATA is pushing its own digital travel pass to help streamline vaccination and test data, and it is also lobbying for much cheaper Covid-19 testing. In sharp contrast to the US, Europe is still in the depths of Covid-19 travel restrictions. The UK's sudden dropping of Portugal from its "green list" of countries with no quarantine requirement was a hot topic at the Fuel Forum on Tuesday. Several speakers cited this as an example of how volatile the restart of international aviation is likely to be, but also as an example of how much pent-up demand for air travel there is. UK bookings to Portugal jumped from 80% below pandemic levels to 20% above after flights to Portugal restarted on May 17. But they collapsed again as soon as Portugal was downgraded to the UK's "amber list." IATA Chief Economist Brian Pearce said global air traffic is still barely a third of pre-pandemic levels, despite booming domestic markets in the US and China and global air cargo traffic that is already above 2019 levels. He sees the global recovery picking up in the second half of this year when the trans-Atlantic travel corridor between Europe and the US is expected to reopen, with a full recovery following within two years. Deloitte's global aviation leader Bryan Terry was confident that global jet fuel demand, and not just air traffic, would eventually recover to 2019 levels, despite the deployment of more fuel-efficient aircraft and a ramp-up in the use of low carbon fuels. Kerry Preston, London

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