Flight tickets likely to get costlier by 25%: Reports
Summarized by AI; it may make mistakes. Check important info
Summarized by AI; it may make mistakes. Check important info
Air ticket prices could rise by up to 25% due to geopolitical tensions and increasing jet fuel prices, according to a McKinsey report.
Amid the ongoing negotiation between US-Iran over a peace deal, Mckinsey report has suggested that air tickets prices are going to rise by 25% in future due to the increasing airline operating costs.
The report says that jet fuel inventories have been declining ahead of the summer travel season, a period when demand for aviation fuel typically rises.
Meanwhile, crude oil prices have increased due to supply disruptions from Gulf regions and Asian countries, which are among the leading exporters of jet fuel, accounting for nearly 40% of global production.
The report noted that reduced production in these countries has contributed to rising aviation fuel prices and higher airfares.
McKinsey reports also highlight that the crack spread for jet fuel could rise to $50 per barrel in 2026, compared to its historical average of around $20.
The crack spread refers to the difference between the price of crude oil and the price of refined petroleum products such as petrol, diesel, and jet fuel.
However, jet fuel prices will continue to fluctuate until stocks are replenished and the supply chain returns to normal, the report cited.
