U.S. airlines spent $6.66 billion on jet fuel in May, marking the second consecutive month where fuel costs exceeded $6 billion, according to data released by the Bureau of Transportation Statistics. This figure represents an 84% increase compared to May of the previous year.
While fuel expenditures surged, the volume of fuel consumed by U.S. carriers saw a slight decrease. In May, airlines used 1.627 billion gallons, a 0.6% decline from the same month in the prior year. Consumption in April also showed a marginal year-over-year decrease.
The average price per gallon of jet fuel in May was $4.09, a slight dip from April's $4.11 but a substantial 85% increase from the $2.21 paid in May of the previous year. This sharp rise in fuel prices is largely attributed to disruptions in global crude and fuel supplies following the conflict in the Middle East and the ensuing impact on shipping routes, including the Strait of Hormuz.
In response to escalating fuel costs, airlines globally have implemented measures such as increasing fares and fees and reducing flight schedules. Fuel is consistently one of the largest operational expenses for the airline industry, making carriers particularly susceptible to fluctuations in energy prices.
Recent developments, including an interim ceasefire agreement between the U.S. and Iran, have led to a moderation in fuel prices from their spring highs, offering some financial relief. However, the stability of this truce remains uncertain. Reports indicate that three tankers were struck by projectiles in the Strait of Hormuz recently, and the U.S. has revoked a license permitting Iranian oil sales under the agreement.
As airlines prepare to release their second-quarter financial results, executives are expected to address the impact of recent fuel price declines on the industry's financial outlook. The average price for a gallon of jet fuel has fallen below $3 per gallon at key airline hubs, a threshold not crossed since early March. As of Tuesday, the Argus U.S. Jet Fuel Index reported prices at $2.88 per gallon across Chicago, Houston, Los Angeles, and New York.