Jet fuel prices/layoffs

[Nick678]

Anyone here predict that the increase in the price of jet will trigger reductions and eventual layoffs?

[flieslikeachicken]

An increase in fuel prices will not lead to layoffs.

If you want to be worried about layoffs, look at the economy. If people aren't buying tickets, then you have a revenue issue, and then you have need to a reduction in flights.

[LR2000]

Anyone here predict that the increase in the price of jet will trigger reductions and eventual layoffs?

Every time I step on a domestic flight it’s generally full in peak times. Going to the states, light loads, leaving I’ve seen heavier loads. Hard to tell.

I know people may not be renovating their homes and rather spend it on vacations.

It just depends what people spend their money on (if they choose to spend it)

[Launchpad1]

Anyone here predict that the increase in the price of jet will trigger reductions and eventual layoffs?

I doubt the cost of jet fuel will cause layoffs directly, however if the Hormuz situation goes on for another couple of months the cost to the world economy could.

Increasing prices of Liquid Gas, plastics, diesel and food could start to have people considering whether going on vacation is a good idea.

If the Hooters get involved in blocking the Bab-el-Mandeb then things could get serious pretty fast.

[‘Bob’]

Anyone here predict that the increase in the price of jet will trigger reductions and eventual layoffs?

Every time I step on a domestic flight it’s generally full in peak times. Going to the states, light loads, leaving I’ve seen heavier loads. Hard to tell.

I know people may not be renovating their homes and rather spend it on vacations.

It just depends what people spend their money on (if they choose to spend it)

You can’t base the health of the economy individual load factors.

Yield management means that airlines are quite efficient at filling up planes in all but the thinnest markets or worst downturns.

Your full plane used to have higher fares, more progressive fare buckets, fewer connections since they used to have direct service from an originating city, more blackouts for points travel, no upgrades, and was 4 times a day not two.

[Blackdog0301]

Don't worry guys. This will all be taken care of when the Tuesday deadline is here.

[Eric Janson]

Anyone here predict that the increase in the price of jet will trigger reductions and eventual layoffs?

The issue is the coming shortage of jet fuel. It may not be possible to operate flights.

Last tankers from the Middle East are getting close to their destinations - no more after they arrive.

Some charts.

https://www.statista.com/chart/amp/3604 ... countries/

An interesting article

https://www.zerohedge.com/markets/europ ... pply-shock

[Nick678]

Anyone here predict that the increase in the price of jet will trigger reductions and eventual layoffs?

I doubt the cost of jet fuel will cause layoffs directly, however if the Hormuz situation goes on for another couple of months the cost to the world economy could.

Increasing prices of Liquid Gas, plastics, diesel and food could start to have people considering whether going on vacation is a good idea.

If the Hooters get involved in blocking the Bab-el-Mandeb then things could get serious pretty fast.

Fuel, being the biggest expense at airline will definitely affect the decision making of management. Most the Asian countries import 95% of their oil and it may become cost prohibitive to charge appropriate airfare to cover the cost and make a profit. WS just cancelled 1000 flights in May. If we follow suit I can see layoffs on the horizon. I hope I'm wrong.

[AA123456]

I'd have to dig back a bit but there were some very bold (irresponsible) statements made regarding Air Canada's wind down and general opinion on fuel hedging at some point pre-2019. These statements were always a ticking time bomb for AC, analysts have pressed management on this for years. If you don't understand fuel hedging in the global transport sector you need to spend the 5 mins chatting with Grok. This is the single biggest black swan event to hit Canadian aviation in decades.. entire careers and long term outcomes are about to be completely upended. Perfect time for a CEO to resign gracefully IMO. Buckle up boys. maybe don't sell the campervans quite yet. You can debate this all you want a million times over. Nothing in this business survives fuel price spikes and shortages to compound. Nothing.

[Launchpad1]

Fuel, being the biggest expense at airline will definitely affect the decision making of management.

For sure, but they will just pass those costs onto the consumer with fuel surcharges. Those surcharges won't put the cost of a ticket up by that much, what's an extra $20 per ticket if you want a vacation badly enough. The thing that will affect people's desicions to buy that ticket (or not) is if they feel unsecure in their own jobs.

[Nick678]

Fuel, being the biggest expense at airline will definitely affect the decision making of management.

For sure, but they will just pass those costs onto the consumer with fuel surcharges. Those surcharges won't put the cost of a ticket up by that much, what's an extra $20 per ticket if you want a vacation badly enough. The thing that will affect people's desicions to buy that ticket (or not) is if they feel unsecure in their own jobs.

Well shit, I hope you’re right.

I was thinking overseas operations might be impacted more significantly. I believe jet has doubled in price and that’s big increase on 100,000 liters required for one flight from yvr-hkg

Im going back to ramen noodles just incase

[Launchpad1]

Well shit, I hope you’re right.

Haha me too!

[goldeneagle]

For sure, but they will just pass those costs onto the consumer with fuel surcharges.

How well did that work when Cuba ran out of jet fuel ?

Most dont seem to realize, the shortages haven't really started yet, fuel out of the gulf was still flowing 5 weeks ago, and the tankers that left then are just now at unloading ports. Thing is, there is no more coming to many of those destinations, so while fuel may be expensive today, it will become unavaiable in the near future at various destinations. Even if things went 'back to nornal' tomorrow, it'll be a couple months before tankers start arriving at those places again. I expect to see some asian destinations announcing that foreign carriers will no longer be able to buy fuel for the trip home sooner rather than later, any supply they have left will be held for domestic carriers.

For domestic stuff, yah, fuel is going to be more expensive, but at some long haul destinations it will soon be classed as unobtainium, cant get it at any price.

[Avcanada123]

Fuel, being the biggest expense at airline will definitely affect the decision making of management.

For sure, but they will just pass those costs onto the consumer with fuel surcharges. Those surcharges won't put the cost of a ticket up by that much, what's an extra $20 per ticket if you want a vacation badly enough. The thing that will affect people's desicions to buy that ticket (or not) is if they feel unsecure in their own jobs.

This is blatantly wrong and downplays the risk. According to CIBC analysts Air Canada needs a 20% increase in ticket prices to cover the cost of the additional gas. That's taking into account that Q2 2026 has a 25% fuel hedge at .69/liter plus distribution costs.

[ChunderBay]

Any company who lays off because of this was going to lay off anyways

Much like the covid nonsense many will use this as a excuse to charge more, provide less, etc

[Avcanada123]

Any company who lays off because of this was going to lay off anyways

Much like the covid nonsense many will use this as a excuse to charge more, provide less, etc

Layoffs I agree, pilots are too expensive to conduct any.
But they need to charge more because they are losing money. Fuel is predicted from $5 billion pre war to $8 billion at the current fuel prices. In the best year ever AC made $2.276 billion (COVID rebound of 2023) which obviously isn't enough profit to cover the extra gas costs.

[pelmet]

Any company who lays off because of this was going to lay off anyways

Much like the covid nonsense many will use this as a excuse to charge more, provide less, etc

Layoffs I agree, pilots are too expensive to conduct any.
But they need to charge more because they are losing money. Fuel is predicted from $5 billion pre war to $8 billion at the current fuel prices. In the best year ever AC made $2.276 billion (COVID rebound of 2023) which obviously isn't enough profit to cover the extra gas costs.

Hopefully, they did some aggressive fuel hedging.

Anybody know how Canadian carriers are doing on that front?

[8895]

Any company who lays off because of this was going to lay off anyways

Much like the covid nonsense many will use this as a excuse to charge more, provide less, etc

Layoffs I agree, pilots are too expensive to conduct any.
But they need to charge more because they are losing money. Fuel is predicted from $5 billion pre war to $8 billion at the current fuel prices. In the best year ever AC made $2.276 billion (COVID rebound of 2023) which obviously isn't enough profit to cover the extra gas costs.

Hopefully, they did some aggressive fuel hedging.

Anybody know how Canadian carriers are doing on that front?

Considering the 680M they put into share buybacks while being at war with their FA’s over wages I’d be very surprised if they were thinking about actual investments into the health of the company like this lol

[Mr.Worldwide]

Post covid AC has only done very light fuel hedging. For the first 6 months of 2026, only 17% of their fuel is hedged at around $.70/L. (the price has since doubled) They haven't released any other forward guidance on hedging so I imagine that's the extent of it. AC hedging policy allows them to go as high as 75% for the current year and 50% for the following. So they had considerable latitude to do a lot more and yet they chose not too, thereby exposing themselves to these sudden fuel shocks.

No one can predict the future, but it doesn't take a genius to see that Trump 2.0 and a rapidly shifting geopolitical landscape have thrown "business as usual" out the window. 17% is an indefensibly low number when the world is clearly in a period of sharp transition. It's hard not to wonder if leadership is still mentally parked somewhere in the mid-2010s.

[thepoors]

I don't see a situation where there are big layoffs due to this. If you look at what happened during covid when the whole world ground to a halt, AC still only laid off ~600 pilots. In early 2020 we were sitting at approx 4000-4500 pilots on property I believe? So give or take 15% got a lay off. This was with 90% of flight ops suspended.

Even if there is a massive fuel shortage I don't see 90% of the fleet being grounded again. The company also got burned with the covid layoffs and was understaffed in the subsequent run-up so I imagine they have learned a lesson there as well.

Fuel will be very expensive yes, but will it be worth grounding a significant amount of flights? I don't think so.

[DSHTRSH]

Is it a safe bet to assume hiring might slow down a little during this whole fuel "situation" ?

[thepoors]

Is it a safe bet to assume hiring might slow down a little during this whole fuel "situation" ?

I was just in the training building and heard 480 new hires is the target for this year with classes every 2 weeks, so for now it seems like full steam ahead. But yes, hiring would obviously be the first thing to get cut if there is a real slow down.

There was supposed to be an equipment bid out this week but the company decided to skip it (min of 4 per year, they can have 6 if they choose to), I imagine they are buying a little time to see how things unfold before the next one in June.

[crystalpizza]

Is it a safe bet to assume hiring might slow down a little during this whole fuel "situation" ?

I was just in the training building and heard 480 new hires is the target for this year with classes every 2 weeks, so for now it seems like full steam ahead. But yes, hiring would obviously be the first thing to get cut if there is a real slow down.

I was told the same thing by a trainer as well (480+120 already hired 2026=600 total for 2026, massive increase in 787 training coming Aug) however bid 2026-2 was just postponed. We'll see if it holds up, as we all know how fast things can change in aviation.

[pilotbzh]

If there is a sign, I didn’t expect to see extra Holliday slot being offered on wide body for July, but there it is on 787 and A330…

[altiplano]

At the same time they are offering buybacks on the 737.

Overseas will pull back most, perhaps disproportionate in some markets, if supply issues surface.

There are no domestic/transborder/Mexico supply issues though so that may be where we see the most activity.