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Iata Alerted to the Disparity Between Local Prices and Global Costs of Oil.
The Iata, the international airline association, is requesting measures from the federal government and Petrobras (PETR4) to adjust the way aviation fuel is priced in Brazil, due to the jet fuel prices considered ‘excessively high’ by the association.
According to the International Air Transport Association (Iata), local fuel prices do not align with the reality of a fuel-producing country, which is one of the main challenges faced by the aviation sector in Brazil. The rise in oil prices also has a direct impact on the costs for airlines.
Aviation Fuels: Petrobras Adjusts Prices Based on Global Factors
At the beginning of each month, Petrobras makes adjustments to aviation fuel prices, taking into account variables such as global oil prices and exchange rates.
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Monopoly and Administrative Costs Impact Aviation Fuel Prices
The head of Iata in the Americas, Peter Cerda, highlighted that Petrobras’ monopoly position and the additional administrative costs charged by the supplier result in artificially inflated fuel prices for aviation.
Complaints from Airlines About Fuel Prices
Local airlines, including Azul (AZUL4), have complained about high aviation fuel prices. The CEO of Azul, John Rodgerson, stated that Brazil has ‘the most expensive fuel in the world’.
Impact of Aviation Fuel Prices on Airline Costs
Aviation fuel accounts for about 40% of an airline’s total costs in Brazil, while the global average is 30%. According to Iata, during a time of exceptionally high prices worldwide, this creates significant impacts on operational costs.
Complaints About Taxes Charged on Jet Fuel
In addition to high aviation fuel prices, airlines complain about the taxes charged on jet fuel in Brazil, stating that this negatively impacts the competitiveness of the sector.
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Source: Info Money
