Duane Emeny, chief operating officer of Air Chathams, has highlighted the serious impact of increasing oil prices on the airline. The conflict in Iran has resulted in the closure of the Strait of Hormuz, a crucial route for global oil shipments, which has driven up prices for oil and subsequently increased operational costs for airlines. The benchmark Brent Crude rose by 18 percent to US$110 a barrel after trading resumed, significantly impacting fuel prices.
Emeny explained that fuel is the airline's third-largest expense after personnel and maintenance, with cost increases translating into about $140,000 more spent monthly. For small airlines like Air Chathams, each 10-cent rise in fuel costs can mean an additional $300,000 in expenses annually. He indicated that if fuel prices remain high, the airline might need to reduce flight schedules to manage costs.
The call for governmental support
The airline chief called on the government to consider measures to support aviation amid this crisis. He suggested reviewing civil aviation authority levies and airways charges, which could provide financial relief, potentially saving the airline around $200,000 a month. He emphasized that such costs are largely uncontrollable and expressed the need for short-term support mechanisms.
"We just have to grin and bear it, but if the government can intervene temporarily, it would be a significant help."
Emeny stated, "We just have to grin and bear it, but if the government can intervene temporarily, it would be a significant help." He stressed the importance of easing regulatory burdens to help airlines cope with the volatile fuel market, which poses a threat to connectivity and the sustainability of regional flights.
