IATA Director-General William Walsh said airline tickets could become more expensive due to the lack of refining capacity and the financial situation of airlines.
He added that the decline in oil refining capacity during the epidemic, and the high prices of jet fuel caused by the increased demand for fuel, are “a concern” for the aviation industry.
US refining capacity has fallen 5.4% in 2022 since it peaked in 2019, an 8-year low. The decline came on the heels of refinery closures and a switch to producing more renewable fuels.
Walsh said that while consumers pay higher fares, airlines don’t necessarily make money.
He continued, “Given the financial condition of many airlines, all that many of them are doing is just passing on the cost increase that they cannot absorb, and they cannot avoid.”
Airline ticket prices rose 25% last year, the largest annual jump since 1989. In April alone, airline ticket prices rose 18.6%, according to the Bureau of Labor Statistics.
Russia and Ukraine war
But Qatar Airways CEO Akbar al-Baker said another factor that could contribute to the high ticket prices was Russia’s announcement of a military mobilization.
On Wednesday, Russian President Vladimir Putin announced a partial military mobilization in Russia, putting its people and economy at war as Moscow’s invasion of Ukraine continues.
Al-Baker told CNBC that China’s Covid policies are his “smallest concern”, and that the biggest concern for airlines is the escalation of the Russian-Ukrainian war, according to what Al-Arabiya.net has seen.
However, Al Baker emphasized that Qatar will continue to fly to Russia as long as it is operationally safe to do so.
Affordable sustainable fuel
Al-Baker called for more investments in alternative fuels, and stressed that Qatar Airways was “ready to invest in sustainable aviation fuel” provided it was “at a reasonable price”.
Last year, the International Air Transport Association set a target for the global air transport industry to achieve net zero carbon emissions by 2050.