energy/fuel

Commercial aviation turbine fuel is a kerosene-based product meeting the requirements (e.g., composition, volatility, fluidity, combustion, corrosion, thermal stability, contaminants, additives) of the ASTM D1655 and/or ASTM D7566 specifications. Jet A (used in the United States) and Jet A-1 are two different grades of kerosene fuel that differ in freezing point.

The price paid for jet fuel is a function of long-term contracts, spot market prices and point of sale, among other factors. Fluctuations in the price of jet fuel are highly correlated with movements in the price of heating oil. In 2008, every dollar increase per barrel (42 gallons) drove an additional $464M in fuel expenses for U.S. passenger and cargo airlines; every penny increase per gallon drove $195M in annual expenses. Historically, fuel expenses have ranged from 10 percent to 15 percent of U.S. passenger airline operating costs, but averaged more than 35 percent in the third quarter of 2008.

Source: Energy Information Administration and ATA analysis

*Prices do not include costs of delivery and storage (e.g., pipeline tariffs, tank fees) or state/federal taxes, all of which can add add 10-20 cents per gallon.
**The simultaneous sale of crude oil against the sale of refined petroleum products. These spread differentials, which represent refining margins, are normally quoted in dollars per barrel by converting the product prices into dollars per barrel and subtracting the crude oil price.