Jet fuel shortage concerns

What happened: Since the U.S. and Israel attacked Iran on February 28, the price of jet fuel in the U.S. has nearly doubled, from $2.50 to $4.88 per gallon by April 2. Air New Zealand has responded by cutting flights and hiking fares due to surging fuel prices, while Airline Aurigny expects no shortages for the next four to six weeks.

Market impact: The airline industry is grappling with both rising fuel costs and supply concerns. Air New Zealand's route cuts and fare increases signal potential revenue losses and reduced passenger volumes, which could impact other airlines and related businesses. Meanwhile, Aurigny's statement suggests that while immediate shortages are not expected, the situation bears close monitoring.

What to watch next: Investors should closely track the U.S. Department of Energy's weekly petroleum status report (April 13) for updates on jet fuel inventories. Additionally, Air New Zealand's half-year results (May 18) may provide insights into the financial impact of flight cuts and fare increases on the company and the broader industry.