Japan Airlines plans to boost its July jet fuel loading volumes by 40% from June on the back of further demand recovery expectation for the next month, a company official told S&P Global Platts on June 17.
JAL's planned hike in its jet fuel loadings in July is up from a 6% month-on-month increase seen in June, according to the JAL official.
JAL's jet fuel outlook comes as it sees its domestic flight demand recovering to a year-on-year fall of 70% in July, compared with the year-on-year plunge of 80% in June and 90% in May.
JAL said week ended June 13 that it expects the cancellation rate of its domestic flights to fall to 54% in the second half of June, from 72% in first half June, in anticipation of a rise in demand following the recent lifting of Japan's state of emergency measures on May 25.
The company also sees its cancellation rate for international flights at 93% in July, down from a 96% cancellation rate in June, due to an expected hike in demand by Japanese returnees from North America and Europe.
Currently, JAL expects its international flight operating rate for North America to improve to 15% in July from 3% in June, compared with 21% in July and 6% in June for Europe.
Rising regional jet prices
The demand recovery by regional airlines have also supported jet fuel prices in Asia, industry sources said.
As the 0830 Asian close June 16, the FOB Singapore jet fuel/kerosene outright price registered at $40.96/b, up $1.68/b day on day. The outright price had fallen to a 21-year low of $13.06/b on April 22, 2020, and has recouped 213% since, S&P Global Platts data showed.
In the derivatives market, the front-month July/August timespread also trended higher and was assessed at minus 79 cents/b, up 15 cents/b since the beginning of the month, Platts data showed. Further down the forward curve, the Q3/Q4 quarterly spread -- an indicator of near term strength or weakness -- was assessed at minus $2.55/b on June 16, up 18 cent/b since the beginning of the month, Platts data showed.
"I think domestic and international flights are running, so demand is [slowly] recovering," a Singapore-based refining source said June 16.
