En esta lista

Analysis: UAE unlikely to see jet fuel demand boost despite return of some passenger flights

Platts LNG Daily

Energía | Petróleo | Productos refinados | Gasolina

Productos derivados del petróleo de Japón: evaluaciones de precios de envíos marítimos y rack

Analysis: UAE unlikely to see jet fuel demand boost despite return of some passenger flights

Lo más destacado

Emirates, Etihad resuming inbound flights

Emirates resumes regular passenger flights to 9 cities Thu

UAE suspended most passenger flights late March

  • Autor/a
  • Dania Saadi
  • Editor/a
  • Jonathan Fox
  • Materia prima
  • Petróleo

Dubai — The UAE is unlikely to see a major uptick in jet fuel demand despite the resumption of some regular passenger flights and easing of travel restrictions in May.

¿No está registrado?

Reciba alertas diarias y avisos para suscriptores por correo electrónico; personalice su experiencia.


Emirates, the world's largest operator of long-haul flights in 2019, on Thursday is starting regular flights to nine cities for the first time since the UAE suspended most passenger flights, except those for cargo and evacuation, in late March. Emirates, which uses Dubai as its hub, restarted a limited number of outbound passenger flights on April 6.

Both Emirates and Abu Dhabi-based Etihad Airways, the second-largest carrier in the UAE, are also resuming a limited number of inbound flights to return UAE residents stuck abroad.

"Given that the average inbound-to-outbound share of flights stands at 52%-48%, resumption of inbound flights should launch some engines back into the sky," said Artyom Tchen, senior oil market analyst at Rystad. "But we should also remember that inbound flights are usually smaller mid-range planes with lower jet fuel demand, so in our forecast resumption of inbound flights brings only a marginal instant jet fuel demand recovery in June-July."

Rystad is forecasting UAE jet fuel demand this year to plunge 32% year on year due to the coronavirus pandemic and continued restrictions on travel.

Bearish outlook

Platts Analytics is just as bearish, forecasting a more than 30% year-on-year decline in UAE jet fuel demand. That compares with a drop of more than 20% in jet fuel demand in the Middle East as a whole.

Jet fuel demand in the UAE alone accounted for more than 30% of consumption in the Middle East and more than 2.5% of global jet fuel demand in 2019, according to Platts Analytics. That demand does not include refueling on the UAE's international flights.

"A great many [UAE flights] will be special fights to assist residents (or non-residents) to get home," said Audrey Dubois-Hebert, a consultant with FGE Energy. "So, I do not believe it is a sign of airlines resuming a normal, commercial service just yet, especially given travelers will need to be eligible to enter their destination country. Flights will be limited for a while longer and won't be enough to give jet fuel demand the boost it needs."

Return to 'normality'

The bearish outlook for aviation in the UAE is also shared by local and international aviation bodies.

Dubai Airports, which manages Dubai International Airport, does not expect passenger flights to return to pre-coronavirus levels within the next 18 months, its CEO said on May 14, echoing previous statements by Emirates, the world's biggest operator of the A380 and Boeing 777 fleet.

Dubai International Airport, the world's busiest hub for international traffic in 2019, handled 17.8 million customers in the first quarter, a year-on-year contraction of 19.8%, due to the pandemic and the suspension of most flights by UAE authorities.

Emirates does not see travel demand returning to "normality" for another 18 months, its chairman Sheikh Ahmed bin Saeed Al Maktoum said on May 10, as the coronavirus pandemic bites into its revenue and passenger numbers.

Emirates carried 56.2 million passengers during the last financial year ended on March 31, down 4% year on year.

No quick rebound in demand

Rystad does not expect jet fuel demand to rebound to pre-coronavirus levels before the start of next year.

"Even though we expect travel restrictions to be gradually lifted, we do not expect airlines to fully restore pre-virus activity due to weak economics," said Tchen. "The restoration will be gradual. Also we don't expect ticket bookings to be as high as before as businesses will have to cut travel costs and consumers would prefer short-range instead of long-range travel."

After Saudi Arabia, the UAE's aviation industry will be the hardest hit in the Middle East and North Africa market this year, according to the International Air Transport Association, which represents 290 airlines comprising 82% of global traffic.

In the UAE, the second-largest Arab economy, the aviation industry is forecast to lose $6.8 billion in passenger revenue amid a 53% drop in passenger numbers in 2020, compared with the previous estimate of $5.36 billion, according to IATA.

The region as a whole is forecast to lose $24 billion in passenger revenue in 2020, compared with a previous estimate of $19 billion, out of a $314 billion total projected for the global aviation industry as countries across the world suspend flights and impose various travel restrictions.

"Even if an airport increases its flight schedule (with more flights per day), it could simply entail a high rate of last minute cancellations on the part of airlines," said Dubois-Hebert. "There is some disconnect between capacity and demand in the current circumstances."