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Tokyo/Singapore — All Nippon Airways said Sept. 28 its planned international flight cancellation rate in November will be lowest since the peak of the coronavirus pandemic, as Japan's top airline plans to resume more flights to the Asia Pacific and increase long-haul flights including to London, a move seen aiding gradual jet fuel demand recovery.

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ANA's planned international flight cancellation rate to be 86% in November, down from 87% in October as it plans to resume a Haneda-Singapore and Narita-Bangkok route as well as increase flights from Haneda to Sydney, Ho Chi Minh City, Manila and London in November, the company said in a statement.

ANA also plans to resume a Haneda-Honolulu route in October and a Haneda-Honolulu route in November, it added.

"The resumption of long-haul flights might be a positive move," said a source with a Japanese refiner. "Although the impact from this might still be limited on the entire [jet fuel] demand but we can see it positively."

Citing the prolonged jet fuel uncertainty with resurgence of the coronavirus pandemic in Europe, the source added: "This is at least good and a welcoming trend for the [jet fuel] demand recovery."

Japan's estimated weekly jet fuel exports -- a substantial portion of which are bonded shipments for international flights -- stood at 1.17 million barrels in four weeks to Sept. 6-12, down 9.8% from the previous four weeks, according to S&P Global Platts calculations based on the Petroleum Association of Japan data.

Eyeing more resumption

ANA will consider resuming more international flights should the Japanese government moves ahead to further relax visitors' entry into the country as well as signing more business and residence track arrangements, an ANA spokesman said.

"I think that the resumption of international flights is a step in the right direction, and [jet fuel] prices will rise with the heightened demand," a Singapore-based refining source said. "But to see a meaningful recovery in the aviation sector, more countries must ramp up on international flights, with necessarily safety precautions in place."

Japan has started allowing the safe resumption of cross-border travel and business exchanges under a business track with Singapore from Sept. 18, with public health safeguards in place including pre-departure and post-arrival testing as well as adherence to a controlled itinerary for the first 14 days in the receiving country.

Japan will start a residence track with Singapore on Sept. 30 and with Brunei from Oct. 8, allowing resident employees and long-term residents to enter the country with a 14-day stay-at-home period, according to the Japanese Ministry of Foreign Affairs.

Prices regain

The gradual resumption of flights also paved way for firmer jet prices and led the FOB Singapore jet fuel/kerosene cash differential to narrow to a one-month high, at a discount of $1.05/b to the Mean of Platts Singapore jet fuel/kerosene assessment at the 0830 GMT Asian close Sept. 25.

The cash differential has jumped 18 cents/b, or 14.63%, since the start of September, and was last assessed higher on August 26, at MOPS minus 66 cents/b, Platts data showed.

In the derivatives market, a significant recovery was also spotted with the front month October-November Singapore jet fuel/kerosene timespread rising for the 4th consecutive session to minus 57 cents/b on Sept. 25, Platts data showed. At the 0300 GMT Sept. 28, brokers pegged the spread even narrower at minus 54 cents/b.

Further down the forward curve, positive sentiment was also observed with the Q4 2020/Q1 2021 spread rising to a three-month high of minus $1.75/b on Sept. 25, rising 38 cents/b, or 17.84%, on the day, Platts data showed.