capacity cuts News & Analysis

Jet Fuel Prices Surge Nearly 100% Amid Middle East Conflict

The price of jet fuel in the U.S. has increased from $2.50 per gallon on February 27 to $4.88 per gallon by April 2, nearly doubling since the U.S. and Israel's attack on Iran on February 28. The effective closure of the Strait of Hormuz is significantly impacting fuel supply, leading to potential flight reductions by airlines like United Airlines (UAL). Domestic capacity growth for U.S. carriers is projected to drop from 2.3% to 2.1% in Q2, with overall capacity forecasted to rise 1.1%, reduced from 2.4%. UBS analysts anticipate further capacity cuts due to rising fuel prices and constraints.