Keep pulling the thread on Benedict Kammel.
The war in Iran and the subsequent closure of the Strait of Hormuz caused a major disruption to global jet fuel supplies.
The primary issue for airlines resulting from the supply disruption is the increased cost of jet fuel, not its availability.
Spirit Airlines ceased operations, citing rising jet fuel prices as the final contributing factor to its long-standing financial problems.
American Airlines projected it would incur an additional $4 billion in fuel costs by the end of the year.
Spirit Airlines did not receive a $500 million government bailout it had been seeking.
The head of the International Energy Agency recently stated that Europe has approximately six weeks of jet fuel reserves remaining before shortages could begin.
The global airline industry had forecasted it would carry more than 5 billion passengers in the current year.
Multiple airlines believe they can pass on 30% to 100% of increased fuel costs to consumers through higher ticket prices.
Fuel can account for as much as 30% of an airline's total operating costs.
A primary theme from recent earnings reports by major airlines like United, Delta, and American was the necessity of passing rising costs on to consumers.
In response to increased market uncertainty since February 28th, some airlines have suspended their financial outlook for the year, while others have revised their forecasts downward.
Even if the war in Iran were to end, oil and jet fuel prices are not expected to decrease immediately due to supply chain lags and damage to infrastructure like refineries.