Author

Saturday, June 22, 2024 | Daily Newspaper published by GPPC Doha, Qatar.
×
Subscribe now for Gulf Times
Personalise your news and receive Newsletters!
By signing up with an email address, I acknowledge that I have read and agree to the Terms of Service and Privacy Policy .
Your email exists
 Pratap John
Pratap John
Pratap John is Business Editor at Gulf Times. He has mainstream media experience of nearly 30 years in specialties such as energy, business & finance, banking, telecom and aviation, and covered many major events across the globe.
Workers connect a Total tanker truck to an Airbus A350 passenger plane, during fuelling with sustainable aviation fuel, at Charles de Gaulle airport in Roissy, France. All roadmaps assume that sustainable aviation fuels will be responsible for the greatest amount of CO2 reductions by 2050, according to a high-level joint review.
Business
Greatest decarbonisation in 2050 to stem from sustainable aviation fuel: Joint review

All roadmaps assume that sustainable aviation fuels (SAF) will be responsible for the greatest amount of CO2 reductions by 2050, according to a high-level joint review.The International Air Transport Association (IATA), together with the Air Transportation Systems Laboratory at University College London (UCL), the Air Transport Action Group (ATAG), the International Council on Clean Transportation (ICCT) and the Mission Possible Partnership (MPP), released the Aviation Net Zero CO2 Transition Pathways Comparative Review.This is the first publication to compare 14 leading net zero CO2 transition roadmaps for aviation. The report aims to provide a “one-stop shop” for airlines, policymakers and all aviation stakeholders to better understand the key similarities and differences between the various roadmaps, and their visions for achieving net-zero carbon emissions for aviation by 2050.Specifically, the report compares the selected roadmaps in terms of their scope, key input assumptions, modelled aviation energy demand, respective CO2 emissions, and the emissions reduction potential of each mitigation lever (new aircraft technologies, zero-carbon fuels, SAF, and operational improvements).Key findings from this analysis include:• Possible pathways to net-zero CO2 emissions by 2050 differ significantly depending on the key assumptions of the authors regarding how decarbonisation technologies and solutions may evolve. Depending on these assumptions, the resulting role of particular levers in aviation’s decarbonisation will be more or less important.• All roadmaps assume that sustainable aviation fuels (SAF) will be responsible for the greatest amount of CO2 reductions by 2050. The role of SAF varies from 24-70% (with a median value of 53%). This wide range reflects the uncertainties regarding potential supportive government action, the level of investments, cost of production, and profit potential, as well as access to feedstocks.• Technology and operational efficiency improvements are expected to have a similar role in the net zero transition across the roadmaps, together contributing to about 30% of the emissions reduction in 2050 in all scenarios.• The estimated emissions savings by hydrogen and battery-powered aircraft vary greatly across the roadmaps, depending on whether a strong pro-hydrogen policy is adopted, and on whether there is a rapid decline in renewable energy prices, enabling swifter uptake of electricity-based technologies.• To achieve net-zero CO2 emissions in 2050, almost all the global roadmaps suggest that the aviation sector will need help from market-based measures and carbon removals to address the residual emissions in 2050.Even if carbon removal technologies are considered an ”out-of-sector” mitigation measure, it is still both urgent and critical to develop these technologies as CO2 will be needed as feedstock for producing power-to-liquid (PtL) fuels.IATA’s senior vice-president (Sustainability) and chief economist Marie Owens Thomsen noted: “The Aviation Net Zero CO2 Transition Pathways Comparative Review demonstrates that there are multiple levers that can be used in different combinations to achieve the objective of decarbonizing aviation by 2050. All these levers will be needed in aviation’s transition.“While the impact of each varies across the roadmaps, all roadmaps expect the greatest decarbonisation in 2050 to stem from SAF. This report provides airlines, policymakers and all stakeholders with a useful tool to analyse and improve their policy, investment, and business choices.“It is particularly important for SAF where strong and urgent public policy support is needed to increase production. Without that, no version of the roadmaps will get us to net zero carbon emissions by 2050.”

Air passengers these days demand seamless and secure payment solutions that match their fast-paced lifestyles. With modern payment methods like mobile payments, digital wallets, and contactless transactions, booking flights and making purchases is not only convenient but also swift, regardless of location or device preference
Business
Airlines work on seamless, secure and relevant payment instruments for passengers worldwide

Air passengers these days demand seamless and secure payment solutions that match their fast-paced lifestyles. With modern payment methods like mobile payments, digital.text-box { float:left; width:250px; padding:1px; border:1pt white; margin-top: 10px; margin-right: 15px; margin-bottom: 5px; margin-left: 20px;}@media only screen and (max-width: 767px) {.text-box {width: 30%;}}**media[165431]**wallets, and contactless transactions, booking flights and making purchases is not only convenient but also swift, regardless of location or device preference.For airlines, embracing these cutting-edge payment technologies is not just a choice but a necessity in remaining competitive and thriving in the industry. These methods drive revenue growth, enhance the overall customer experience, and streamline operational efficiency.Airlines heavily depend on ticket sales and ancillary services for revenue, and modern payment methods empower them to attract a diverse range of customers by offering flexible payment options tailored to individual preferences and requirements.Given the global reach of airlines, catering to passengers from various regions with different banking systems and currencies is imperative. Modern payment solutions facilitate seamless international transactions, enabling airlines to broaden their customer base and strengthen their market presence.The IATA Financial Settlement System (IFSS) stands as a cornerstone in the global aviation ecosystem, facilitating the secure and efficient movement of funds throughout the air travel value chain. Continuously evolving, IFSS has adapted lessons learned from unprecedented challenges such as the pandemic, enhancing its resilience and effectiveness.As customer behaviour evolves and new business models emerge, IFSS remains agile, accommodating the needs of a dynamic industry landscape while upholding its commitment to security and efficiency."“We want to know where we need to move to in the next three-to-five years,” noted Mohamed Albakri, IATA’s senior vice-president (Financial Settlement and Distribution Services).“Where is the value in the IFSS and how should the scope be improved? It must continue to be aligned with airline needs.One obvious answer is accepting new forms of digital payment. The Billing and Settlement Plan (BSP), one of the IFSS services, is based on a “collect on behalf” model from the travel agencies and also processes debit and credit cards.But airlines—responding to customer requirements—must be ready to accept many different forms of payment.The pandemic was an accelerator in the use of different payment instruments, a trend that Albakri believes is here to stay.In fact, there are estimated to be close to 200 forms of payments around the world, many of which are unique to a region or even a country.As many airlines are global entities, they need to assess which forms are the most relevant for their markets and their customer base. Studies have shown that sales can be lost if a customer’s preferred method of payment is not available.But being all things to all customers is easier said than done. Airlines have a multitude of costly back-office processes to integrate for every payment method, including reconciliation and reporting.“As indicated by participants in the IATA Financial Settlement System, potential opportunities could bring the value the IFSS offers to these other forms of payment as it does for BSP sales,” says Albakri.“In BSP sales, there are strong standards. But the same cannot be said about new digital processes. How is the payment managed, which data element is captured at what point, and exactly how does it get handed over?“At IATA, efforts are underway through the work of related standard management groups assessing the development of standards to facilitate the adoption of payment instruments that are relevant to airlines and their customers,” he adds. “We are also making solutions available to facilitate payment orchestration and instant bank transfers.”Albakri highlights a number of trends in the payment sphere. One of the most significant is digital currencies. This refers to the digitalisation of public money or cash from the central bank as opposed to cryptocurrency digital assets.Europe is getting closer to implementing the digital euro, China has already piloted the digital yuan (e-CNY), and the United Arab Emirates will have the digital dirham by end 2025.In fact, more than 130 countries around the world, representing 98% of global GDP, are reported to be studying the possibilities.Digital currencies, IATA says will give central banks better control and full visibility on every transaction and will allow them to incorporate additional services to merchants such as digital invoicing and statements. And it should also help merchants to negotiate better terms with incumbent payment service providers.Beyond digital currencies, Albakri notes that the digital payment sector has yet to mature. Failures, mergers and acquisitions will therefore be the order of the day over the next few years.Perhaps most importantly, payment is at the heart of modern airline retailing. Payment encapsulates the end-to-end journey and is a central pillar of the offer and order management process.If airlines aim to be truly customer-centric, then they must have seamless, secure, and frictionless payment at the core of their product.“A superior customer experience starts by making sure that customers can buy and pay without friction, using the payment method of their choice,” says Albakri. “Offering the service that customers want and making available their preferred payment method creates a win-win proposition for airlines and their customers.”Albakri added: “The payment landscape is larger and even more complicated than distribution. Airlines have taken back control of distribution, and they now need to take back control of payment.”

Gulf Times
Qatar
Qatar's real GDP growth forecast at 2.1% this year, 3.2% in 2025: World Bank

Qatar's real GDP growth has been forecast at 2.1% this year and 3.2% in 2025, World Bank said in its latest update Monday.The country’s debt to GDP stood at 42.4% in 2022 and 41.4% in 2023, World Bank noted.World Bank’s new Middle East and North Africa Economic Update, entitled ‘Conflict and debt in the Middle East and North Africa’, shows that lackluster growth, rising indebtedness and heightened uncertainty due to the conflict in the Middle East are impacting economies across the region.According to the report, MENA economies are expected to return to low growth akin to the decade prior to the pandemic. MENA’s gross domestic product (GDP) is forecast to rise to 2.7% in 2024, which is a tepid increase from 1.9% in 2023.As in 2023, oil importing and oil exporting countries are likely to grow at less disparate rates than 2022, when higher oil prices boosted growth in oil exporters.For Gulf Cooperation Council (GCC) countries, the World Bank noted the 2024 growth uptick reflects expectations of robust non-oil sector activity and fading out of oil production cuts towards the end of the year. GDP growth in almost all oil importing countries is expected to decelerate.The report looks at the economic impact of the conflict in the Middle East on the region. Economic activity in Gaza has come to a near standstill. The GDP of the Gaza strip dropped by 86% in last quarter of 2023.The West Bank has plunged into a recession, with simultaneous public and private sector crises.A recent World Bank report goes into further depth on damages to the Gaza Strip and catastrophic impacts on the people of Gaza.The economic impact of the conflict on the rest of the region has remained relatively contained, but uncertainty has increased. For example, the shipping industry has coped with shocks to maritime transport by rerouting vessels away from the Red Sea, but any prolonged disruptions to routes through the Suez Canal could increase commodity prices regionally and globally.The report also looks at rising indebtedness in the MENA region. Between 2013 and 2019, the median debt-to-GDP ratio for MENA economies increased by more than 23 percentage points.The pandemic made things worse as declines in revenue, together with pandemic support spending, increased financing needs for many countries.This rising indebtedness, the World Bank noted is heavily concentrated in oil-importing economies, which now have a debt-to-GDP ratio 50% higher than the global average of emerging market and developing economies.Approaching 90% of GDP in 2023, oil-importing countries in MENA have a debt-to-GDP ratio almost three times higher than that of oil exporting countries in the region.The World Bank report presents evidence that oil-importing countries in MENA have been unable to grow out of debt or inflate their debt away, making fiscal discipline essential to curb indebtedness.Critically, off-budget items which have played a large role in some MENA economies have been to the detriment of debt and fiscal transparency. The challenge for oil exporters is one of economic and fiscal-revenue diversification, given the structural change in global oil markets and the rising demand for renewable sources of energy. “Overall, MENA economies need to undertake structural reforms, chief among them transparency, to unlock growth and forge a sustainable path ahead,” the World Bank said.

Point of sale (POS) transactions were valued at QR8.13bn in March this year, according to Qatar Central Bank.
Qatar
Big rise in POS transactions in Qatar

Point of sale (POS) transactions were valued at QR8.13bn in March this year, Qatar Central Bank (QCB) said Sunday.In comparison, point of sale transactions amounted to QR7.72bn in March 2023 and QR6.6bn in March 2022, QCB said in its post on X.The volume of point of sale transactions stood at 32.43mn in March this year, while it was 29.5mn in March last year and 23.2mn in March 2022.According to QCB, the number of point of sale devices in Qatar totalled 70,567 in March this year compared with 63,832 in March 2023 and 50,103 in March 2022.A POS or point-of-sale system is a combination of hardware, software and payment services that businesses use to make sales.E-commerce transactions in Qatar, QCB said, totalled QR3.66bn in March this year.In March 2023, e-commerce transactions in Qatar amounted to QR2.55bn, while it stood at QR3.09bn in March 2022.Qatar registered 6.44mn e-commerce transactions in March this year, QCB said.In March last year, the volume of e-commerce transactions in the country was 4.9mn. And in March 2022, it stood at 4.34mn.The number of active bank debit cards in the country totalled 2,246,677 in March, Qatar Central Bank said.QCB said credit cards in Qatar totalled 686,347 and pre-paid cards 723,395 in March.

Gulf Times
Qatar
Qatar Airways, other airlines resume services

Qatar Airways has resumed services to Amman, Beirut and Baghdad, the national airline said in a post on X.The airline has urged customers “to monitor its website for near-term travel schedules or call the Contact Centre on +974-41445555”.Other major airlines across the Middle East region announced they would resume operations in the region after cancelling or rerouting some flights as Iran launched dozens of drones and missiles at Israel through Saturday night into Sunday.Emirates Airlines, which had cancelled some of its fights and rerouted others due to temporary airspace closures in the region, was resuming scheduled operations to and from Jordan, Lebanon, and Iraq from Sunday afternoon, a spokesperson said.Etihad Airways said it is planning to operate scheduled passenger and cargo services between Abu Dhabi and Tel Aviv, Amman and Beirut starting from Monday.Etihad warned that as services return to normal after the temporary closure of airspace across parts of the Middle East, "there may still be a risk of some knock-on disruption across Monday, April 15"."Some of our flights have been affected by the temporary closure of a number of airspaces in the region," a statement from the United Arab Emirates' Fly Dubai was quoted on state news agency WAM as saying.The attack had spurred similar announcements from Lebanon, Egypt and Kuwait following several Arab countries announcing the temporary closure of their airspace.Jordan, Iraq and Lebanon announced on Sunday morning that they had reopened their airspace following the overnight attacks.

Qatar's food inflation remained low in most part of 2023 and was less than 4.5% year-on-year in 10 months of last year up to December, according to the World Bank’s latest food security update
Business
Qatar's food inflation remains low in most part of 2023: World Bank

Qatar's food inflation remained low in most part of 2023 and was less than 4.5% year-on-year in 10 months of last year up to December, according to the World Bank’s latest food security update.Qatar’s food inflation is also among the lowest in the category of “high income countries”, where it figures.According to the World Bank, Qatar’s food inflation stood at 0.7% in March 2023.The country’s food inflation in the remaining part of 2023 were: April (1.4%), May (-2.2%), June (-0.7%), July (1%), August (0.5%), September (1.9%), October (3.7%), November (3.8%) and December (4.5%).In the seven months from March 2023 to September last year, Qatar’s food inflation donned the green colour code, which denoted it was less than 2%.From October to December 2023, the colour code was yellow, which denoted the price increase was between 2% and 5%.World Bank’s data indicate that Qatar performed well in tackling food inflation when compared to neighbouring GCC countries and among high-income countries.According to the World Bank, domestic food price inflation remains high across the world. Inflation higher than 5% is experienced in 60% of low-income countries (no increase since the last update on March 18, 2024), 63.8% of lower-middle-income countries (no change), 39% of upper-middle-income countries (7.0 percentage points lower), and 27.3% of high-income countries (no change).In real terms, food price inflation exceeded overall inflation in 58.9% of 168 countries where data is available.According to the Food and Agriculture Organisation (FAO), there is a pressing need for external food assistance in 45 countries worldwide: 33 in Africa, nine in Asia, two in Latin America and the Caribbean, and one in Europe.The primary drivers of acute food insecurity in these regions are conflicts in Near East Asia and West and East Africa and widespread dry weather conditions in southern Africa.The list of countries requiring external assistance can be categorised into three broad, non-mutually exclusive groups: those with exceptional shortfalls in food production and supplies due to factors such as natural disasters, conflict, and supply chain problems; those with widespread lack of access to food due to conflict and economic factors such as low incomes and high food prices; and those with severe food insecurity in some areas due to factors such as refugee influx and crop failures combined with extreme poverty.The latest FAO monthly report on food price trends reveals a global downturn in the prices of major cereals during February 2024, primarily due to abundant supplies and fierce competition among exporters resulting in decreases in international wheat, maize, and rice prices.Despite these international declines, domestic staple food prices remained high in many countries, primarily because of factors such as extreme weather events, conflict, insecurity, and currency depreciation. Disruptions in shipping routes, such as in the Panama Canal and the Red Sea, pose further challenges by increasing food import costs, the report said.

The  country targets 5GW of solar capacity by 2035, driven by two additional solar power projects in Mesaieed and Ras Laffan industrial cities, GECF said in its ‘Global Gas Outlook 2050’.
Qatar
Qatar's power generation sector to see increase in natural gas use: GECF

Qatar's power generation sector has been forecast to provide a slight increase in natural gas use due to rising renewables capacity, according to Doha- headquartered Gas Exporting Countries Forum.The country targets 5GW of solar capacity by 2035, driven by two additional solar power projects in Mesaieed and Ras Laffan industrial cities, GECF said in its ‘Global Gas Outlook 2050’.The 800-MW Al Kharsaah solar PV plant was commissioned in 2022. Two additional solar power projects in industrial cities, Mesaieed and Ras Laffan, with a combined capacity of about 880 MW are planned within the next two years, GECF noted.The Al Kharsaah Solar PV Power Plant (KSPP) is owned by a joint venture between affiliates of QatarEnergy Renewable Solutions (60%), Marubeni (20.4%) and TotalEnergies (19.6%). QatarEnergy Renewable Solutions is QatarEnergy’s investment arm specialising in renewable and sustainable energy investments and projects.QatarEnergy is consolidating its position in the renewables business and is delivering a mid-term target of generating 5GW of solar power by 2035 as part of its Sustainability Strategy.In addition to increasing solar capacity to over 5GW, the strategy targets reducing greenhouse gas emissions, and deploying carbon capture and storage technology to capture over 11mn tonnes per year of CO2 in Qatar by 2035.In Qatar, natural gas demand is set to grow by 18bcm over the outlook period (up to 2050), GECF said. Most of additional demand comes from rising gas use linked to energy sector-related needs amid the expansion of LNG export production capacity.Moreover, the country is exploring ways to diversify the economy and investments in low-carbon gas-based solutions are key to this diversification.In this context, blue hydrogen generation and its derivatives are poised to present additional natural gas demand growth opportunities.For example, Qatar recently unveiled plans to build the world’s largest blue ammonia plant: scheduled to be operational in 2026, the facility is expected to generate sales of 1.2mn tonnes per year.Qatar’s proposed blue ammonia facility is part of the country's strategy to offer low-carbon energy solution for a sustainable future.QatarEnergy’s affiliates, QatarEnergy Renewable Solutions and Qatar Fertiliser Company (Qafco) signed the agreements for the construction of the Ammonia-7 project, the industry’s first world-scale as well as the largest blue ammonia train, which is expected to come into operation by the first quarter of 2026.Blue ammonia is produced when the carbon dioxide generated during conventional ammonia production is captured and stored. It can be transported using conventional ships and then be used in power stations to produce low-carbon electricity.The new plant, which is estimated to cost $1.156bn, will be located in the Mesaieed Industrial City and operated by Qafco as part of its integrated facilities.

Stable rents will limit the rise in inflation in Qatar, Oxford Economics said as the researcher projects the country's inflation to slow to average 2.6% in 2024
Business
Stable rents to limit rise in Qatar's inflation: Oxford Economics

Stable rents will limit the rise in inflation in Qatar, Oxford Economics said as the researcher projects the country's inflation to slow to average 2.6% in 2024.Headline inflation rose to 1.7% in December last year, “defying” what Oxford Economics said of “expectations of a slowdown”, from 1.3% in November 2023.Prices rose 0.9% month-on-month, the third highest monthly increase last year.The key drivers behind the monthly rise were the food category and prices of recreation and culture, but clothing prices also surged. Housing, which has the largest share in the CPI basket were stable, leaving prices 2.9% lower than in the same month the year before. “This supportive base effect will continue in the coming months. Overall, inflation averaged 3% in 2023, slightly higher than the 2.9% we projected, but will slow to average 2.6% this year,” Oxford Economics noted.After inflation turned negative in 2020, it climbed to 2.3% in 2021 and 5% in 2022 amid rising global food and energy prices and increasing demand in the runup to the World Cup.In its latest country update, Oxford Economics said, “We now forecast average inflation at 2.6% in 2024, up from 2.2% in our previous projection, after it averaged 3% last year.“Inflation was higher than we expected in December at 1.7%, pushed up by food, recreation and culture, and communication prices. We see no implications of this modestly higher inflation forecast for Qatar's monetary policy. Our revised baseline assumes the central bank will follow the US Federal Reserve in lowering rates once per quarter, starting in May.”The researcher's updated baseline assumes interest rates will stay at 6% until May, when Qatar Central Bank starts to gradually loosen policy.High borrowing costs will continue to undermine non-energy growth, notwithstanding supportive energy and fiscal trends.Banks in Qatar, the researcher noted, “have been resilient and are well-capitalised and profitable, with low levels of non-performing loans.”Due to improved domestic liquidity, banks' reliance on foreign funding has relaxed but is still high.Qatar has passed various reforms to attract foreign capital, but diversification efforts across the region suggest competition, with all GCC countries trying to tap into a similar pool of resources and demand, Oxford Economics noted.

Gulf Times
Business
Middle East region requires $1.1tn investment until 2050 to achieve projected natural gas production: GECF

The Middle East region requires $1.1tn investment until 2050 to achieve projected natural gas production of 1,165 bcm, the Gas Exporting Countries Forum (GECF) said in its ‘Global Gas Outlook 2050’.Qatar is estimated to account for 14% of the required investment until 2050, GECF said.Iran, Qatar, Saudi Arabia, and the UAE are poised to account for 87% of the gas upstream required investment in the region, the report said.The Middle East region holds substantial natural gas reserves and significant potential for further production growth, the outlook said.Looking ahead to 2050, the outlook anticipates a significant surge in natural gas production, with the region projected to reach 1,165 bcm by 2050. This additional increase of 480 bcm is expected to elevate the region’s share in global natural gas production to 21% by 2050, up from its 17% share in 2022.According to GECF, the majority of upstream investments are expected to be directed toward conventional gas reservoirs, while unconventional assets are anticipated to require 28% of the investment in the region, specifically in the UAE, Saudi Arabia, and Oman.In 2022, Qatar’s upstream capital investment witnessed a remarkable doubling, reflecting an increase of $2.2bn.This surge, GECF noted, can be attributed to two substantial expansions within the world’s largest natural gas field, the North Field.“The outlook considers the initiation of both the North Field East and North Field South expansions, slated for 2026 and 2028 respectively. These expansions are anticipated to propel Qatar’s production to 310 bcm in 2050, requiring a total upstream investment of $160bn,” GECF said.Global gas production is anticipated to reach 5.3 tcm by 2050, GECF said.Achieving this substantial growth in gas supply will necessitate sustained investment across all segments of the natural gas value chain.The natural gas sector is expected to require $9tn of investments along the value chain.The total upstream global investment required is projected to amount to $8.2tn.The lion’s share of gas investments is expected to be allocated to conventional assets, accounting for $5.3tn.In contrast, unconventional investments are projected to make up $2.8tn, representing 34% of the total global upstream gas investment.Natural gas investment exhibits regional disparities in distribution. In that order, leading the way in upstream investment are the Asia Pacific and North America, followed by Eurasia, Africa, the Middle East, Latin America and Europe.GECF noted the differences in required capital expenditure across regions can be attributed in part to factors like the type of hydrocarbon, location, and project type of natural gas supply. Globally, the projected rise in natural gas supply is anticipated to primarily come from non-associated conventional hydrocarbons located in offshore and YTF fields.However, the degree of this transition varies from region to region. As a result, the capital expenditure necessary for each unit of marginal production varies across these regions. This divergence is likely to impact the allocation of invested funds and consequently influence natural gas prices, GECF said.

Willie Walsh, director general of the International Air Transport Association.
Business
Middle Eastern airlines record 19.7% y-o-y increase in passenger demand in February: IATA

Middle Eastern airlines have recorded a 19.7% year-on-year (y-o-y) increase in passenger demand in February, IATA said in its latest update.Regional passenger capacity (including GCC) increased 19.1% year-on-year and the load factor rose to 80.8%, IATA said.The Middle East’s total demand, measured in revenue passenger kilometres (RPKs), was up 21.5% compared to February 2023.Total capacity, measured in available seat kilometres (ASK), was up 18.7% year-on-year. The February load factor was 80.6% (+1.9ppt compared to February 2023).International demand rose 26.3% compared to February 2023; capacity was up 25.5% year-on-year and the load factor improved to 79.3% (+0.5ppt on February 2023).Domestic demand rose 15.0% compared to February 2023; capacity was up 9.4% year-on-year and the load factor was 82.6% (+4.0 ppt compared to February 2023), IATA said.All regions showed double-digit growth for international passenger markets in February 2024 compared to February 2023.For the first time, demand for international services exceeded pre-pandemic levels (+0.9% compared to February 2019). This, however, is skewed by February 2024 being a leap-year with an extra day compared to February 2023.Asia-Pacific airlines saw a 53.2% year-on-year increase in demand. Capacity increased 52.1% year-on-year and the load factor rose to 84.9% (+0.6ppt compared to February 2023), the highest among all regions.Domestic demand growth was led by China (+35.1% compared to February 2023) which benefitted from unrestricted Lunar New Year travel.IATA’s Director General Willie Walsh said, “The strong start to 2024 continued in February with all markets except North America reporting double-digit growth in passenger traffic. There is good reason to be optimistic about the industry’s prospects in 2024 as airlines accelerate investments in decarbonisation and passenger demand shows resilience in the face of geopolitical and economic uncertainties.“It is critical that politicians resist the temptation of cash grabs with new taxes that could destabilise this positive trajectory and make travel more expensive. In particular, Europe is a worry as it seems determined to lock in its sluggish economic recovery with uncompetitive tax proposals.”

Qatar banking sector deposits increased 1.4% during February to reach QR1,028.6bn, driven by both the public and private sectors, according to QNB Financial Services
Business
Qatar banks make sizeable gains in overall deposits driven by public and private sectors: QNBFS

Qatar banking sector deposits increased 1.4% during February to reach QR1,028.6bn, driven by both the public and private sectors, according to QNB Financial Services (QNBFS).Deposits growth in February was mainly due to an increase by 2.2% in the public sector and 1.1% in the private sectorDeposits grew by an average 4.1% over the past five years (2019-2023), QNBFS said in its ‘Qatar monthly key banking indicators’.The overall loan book went down 0.5% in February to QR1,312.9bn.The loans decline in February was mainly due to a drop by 0.4% in the private sector and 0.7% in the public sector.Loans increased by 1.9% in 2024, compared to a growth of 2.5% in 2023. Loans grew by an average 6.5% over the past five years (2019-2023)Loan provisions to gross loans stood at 3.8% in February and 4% in January, QNBFS said.Total assets edged down by 0.2% during February to QR1.97tn.The total assets loss in February was mainly due to a slide by 0.4% in domestic assets.Total assets was marginally higher in 2024, compared to a growth of 3.4% in 2023. Assets grew by an average 6.8% over the past five years (2019-2023)Liquid assets to total assets was at 30.6% both in February and January 2024, QNBFS said.In terms of overall deposits, the government institutions’ segment (represents 55% of public sector deposits) went up by 2.3% MoM (+5.6% in 2024), while the semi-government institutions’ segment rose by 5.1% MoM (+1.6% in 2024).The government segment (represents 30% of public sector deposits) moved up by 0.7% MoM (+15.2% in 2024) in February.Private sector deposits expanded 1.1% MoM (+2.7% in 2024) in February. On the private sector front, the consumer segment increased by 1.2% MoM (+3.4% in 2024), while the companies and institutions’ segment gained by 0.9% MoM (+1.9% in 2024).Non-resident deposits added 0.7% MoM (+2.1% in 2024) in February.The overall loan book went down 0.5% in February 2024. Total private sector loans moved lower by 0.4% MoM (+0.5% in 2024). Consumption and others, general trade and real estate were the main drivers for the private sector loan drop.Consumption and others (contributes 21% to private sector loans) fell 1.5% MoM (+0.3% in 2024), while general trade (contributes 21% to private sector loans) moved down 0.5% MoM (+1% in 2024), and the real estate segment (contributes 20% to private sector loans) slid 0.4% MoM (+0.4% in 2024).However, the services (contributes 32% to private sector loans) moved up 0.6% MoM (+1% in 2024) in February.Outside Qatar loans edged down by 0.2% MoM (-1.1% in 2024) during February.Total public sector loans contracted 0.7% MoM (+5.7% in 2024) in February 2024. The government segment (represents 31% of public sector loans) was the main catalyst for the public sector with a drop by 3.2% MoM (+12.3% in 2024).However, the semi-government institutions’ gained 4.2% MoM (+4.8% in 2024) and the government institutions’ segment (represents 63% of public sector loans) rose marginally MoM (+2.8% in 2024).Qatar banking sector’s loan provisions to gross loans was at 3.8% in February, compared to 4% in January, QNBFS noted.An analyst told Gulf Times: “The banking sector continued to make sizeable gains in overall deposits, with both the public and private sector gaining by 2.2% and 1.1%, respectively. The public sector was pushed higher mainly by government institutions and semi-government institutions, while the private sector was lifted up by both the personal and companies and institutions”.

Luggage is prepared for an American Airlines flight at O'Hare International Airport in Chicago. As demand for air travel rebounds to pre-pandemic levels, the cost of flights is soaring, compounded by escalating expenses such as baggage fees. These surging fees are reportedly placing a considerable strain on travellers' finances.
Business
Flight costs soar globally on escalating baggage and add-on fees

As demand for air travel rebounds to pre-pandemic levels, the cost of flights is soaring, compounded by escalating expenses such as baggage fees. These surging fees are reportedly placing a considerable strain on travellers' finances. .text-box { float:left; width:250px; padding:1px; border:1pt white; margin-top: 10px; margin-right: 15px; margin-bottom: 5px; margin-left: 20px; }@media only screen and (max-width: 767px) {.text-box {width: 30%;} } **media[160148]** A recent study conducted by IdeaWorksCompany, a leading airline ancillary revenue consultancy, in collaboration with car rental firm CarTrawler, revealed that airlines worldwide raked in an estimated $33.3bn from baggage fees alone last year. This comprehensive report, analysing revenue disclosures from some 120 major airlines globally, underscores the significant financial impact of ancillary charges on travellers. Primarily focused on checked baggage, these fees also encompass additional charges for overweight bags and larger carry-ons. Notably, numerous North American carriers have recently upped the ante on checked bag prices, with higher fees imposed for last-minute or airport check-ins compared to online pre-flight arrangements. Several carriers are encouraging customers to pay to check their bags ahead of their flight, an approach the airlines argue will free up employees at check-in areas and get travellers to their gates faster. “Luggage fees are a big moneymaker for airlines”, according to CNBC. In the first nine months of 2023, US airlines brought in more than $5.4bn from baggage fees, up more than 25% from the same period of 2019, according to the Transportation Department’s latest data. Airlines have argued that higher costs such as labour and fuel, their biggest expenses, mean they had to raise bag fees. Some airlines are urging passengers to prepay for checked bags, citing streamlined check-in processes and expedited boarding as benefits. However, these additional charges are becoming a “lucrative” revenue stream for certain airlines, with US carriers reporting a staggering $5.4bn in baggage fees in the first nine months of 2023 alone, a 25% increase from pre-pandemic levels. While airlines argue that rising operational costs necessitate these fee hikes, industry experts caution that escalating baggage fees are driving more travellers to rely on carry-ons to avoid additional charges. Consequently, overhead storage space becomes increasingly scarce, resulting in delays and passenger inconvenience during boarding. "If you are charging for checked bags, you better start charging for carry-on as well," an official remarked. "Otherwise, people are going to do the only logical thing...they are going to shift from checked bags to carry-ons, which are free." The prevailing sentiment among experts suggests that the proliferation of ancillary fees, including baggage, seat selection, and priority boarding, substantially inflates the overall cost of travel, particularly impacting budget-conscious travellers and families. Budgeting for a trip becomes even more challenging when travellers are confronted with a myriad of potential add-on fees, often excluded from the initial ticket price, leading to unexpected financial burdens while travelling. Moreover, the proliferation of diverse fee structures and add-on options often complicates the booking process, requiring travellers to navigate through various offerings and decipher associated terms and conditions. The result is that travellers will have to navigate through various options and understand the terms and conditions associated with each add-on, which can be time-consuming and confusing. This lack of transparency impedes travellers' ability to compare prices effectively and make informed decisions, resulting in frustration and dissatisfaction among passengers. Pratap John is Business Editor at Gulf Times. Twitter handle: @PratapJohn

HE the Minister of State for Energy Affairs, Saad Sherida al-Kaabi, also the President and CEO of QatarEnergy speaking at the  long-term time charter party (TCP) agreement ceremony Sunday.
Qatar
QatarEnergy’s 'historic' fleet expansion programme totals 104 conventional LNG vessels

QatarEnergy’s “historic” fleet expansion programme now total 104 conventional LNG vessels with Sunday’s long-term time charter party (TCP) agreements with four international shipowners for the operation of some 19 LNG vessels.The agreements were signed with top executives of the four international shipowners by HE the Minister of State for Energy Affairs, Saad Sherida al-Kaabi, also the President and CEO of QatarEnergy at the company’s headquarters.Sunday’s long-term time charter party (TCP) agreements with four international shipowners for the operation of 19 new, ultra-modern conventional size LNG vessels were part of the second ship-owner tender under QatarEnergy’s LNG fleet expansion programme.The agreements cater for the operation of six vessels by CMES LNG Carrier Investment Inc., six vessels by Shandong Marine Energy (Singapore) Pte Ltd., and three vessels by MISC Berhad; all of which are being constructed at Samsung Heavy Industries in South Korea.The remaining four vessels will be operated by a joint venture of Kawasaki Kisen Kaisha Ltd. (K-Line) and Hyundai Glovis Co. Ltd. and are being constructed at Hanwha Ocean (formerly Daewoo Shipbuilding & Marine Engineering) also in South Korea.Al-Kaabi signed four separate sets of agreements with Wang Yongxin, president & CEO of CMES LNG Carrier Investment, Li Maozhong, chairman, Shandong Marine Energy, Satoshi Kanamori, managing executive officer, K Line and Jungsuk Kim, vice president, Hyundai Glovis and Captain Rajalingam Subramaniam, president & CEO, MISC Berhad.Commenting on the occasion, al-Kaabi said: “Today’s signings form a significant milestone in QatarEnergy’s LNG fleet expansion programme, as it marks the conclusion of the conventional sizes vessels portion of programme, bringing the total number of ships for which we have signed TCPs to 104 vessels, a massive undertaking that is the largest shipbuilding and leasing programme ever in the history of the industry.“These ships will support our expanded LNG production capacity from the North Field in Qatar and Golden Pass in the US, while also meeting our long-term fleet replacement requirements. The careful shipowner selection process followed a detailed and rigorous global tender, signifying QatarEnergy’s commitment to expanding its fleet of modern LNG carriers in collaboration with world-class shipowners and in an open and transparent manner.”Al-Kaabi added, “We are very proud to strengthen our collaboration with these esteemed shipowners. And, we have full confidence that the 19 vessels will be operated with the latest and most advanced safety, technical and environmental standards. This is an important undertaking that will enable QatarEnergy to continue delivering cleaner energy to the world safely and reliably.“I would like to thank the shipowners present with us today, and to extend my thanks and gratitude to the team leaders and members from QatarEnergy and QatarEnergy LNG, who were entrusted with the acquisition and leasing of these vessels, for their dedicated work throughout the past few years.“I am also honored to express my most sincere thanks and gratitude to His Highness Sheikh Tamim bin Hamad Al Thani, the Amir of the State of Qatar for his wise leadership and guidance, and the unlimited support of the energy sector of the State of Qatar.”Since 2022, QatarEnergy has signed a series of TCPs for the long-term charter and operation of 104 conventional LNG vessels, as part of its historic LNG fleet expansion programme.This initiative will support QatarEnergy’s expanding LNG production capacity from the North Field LNG expansion and Golden Pass LNG export projects, as well as meeting its long-term fleet replacement requirements.As many as 43 ships out of the 104 will be chartered by QatarEnergy’s affiliate ‘QatarEnergy Trading’, marking it the single largest one-step ship acquisition program of any single entity in the history of the LNG industry, and placing QatarEnergy and consequently QatarEnergy Trading firmly on the road to becoming a leading global LNG trader.The 19 conventional LNG vessels, part of latest agreements, have a capacity of 174,000 cubic meters each and will be equipped with the latest LNG shipping technologies.These embody QatarEnergy’s ongoing endeavour to achieve optimal fuel efficiency and reduce carbon emissions.


A general view of the Ras Laffan Industrial City, Qatar’s principal site for the production of liquefied natural gas and gas-to-liquids (file). The potential for Qatar’s LNG exports envisions a growth of 2.6 times, reaching 208mn tonnes by 2050 from the current level of 77mn tonnes, according to the GECF.
Business
Qatar accounts for 75% of Middle East region’s LNG liquefaction capacity, says GECF

Qatar currently accounts for more than 75% of Middle East region’s LNG liquefaction capacity, the Gas Exporting Countries Forum (GECF) has said in a report.Currently, the region possesses 101mn tonnes per year (mtpy) of liquefaction capacity, “primarily dominated” by Qatar’s 77 mtpy, GECF said in its ‘Global Gas Outlook 2050’.Plans are in progress from 2022 to 2050 to add approximately 130 mtpy of extra LNG liquefaction capacity to the region, with Qatar leading expansion efforts, GECF noted.The primary force propelling natural gas exports from the Middle East is set to be growth in LNG supplies, notably led by Qatar, it said.The utilisation rate of this increased LNG liquefaction capacity is projected to be high, surpassing 90% by 2050. Furthermore, there are plans to consider an extra 1 mtpy of liquefaction facilities in Oman, along with the prospective development of LNG liquefaction facilities in Iraq post-2030s and in Iran post-2040s.Currently, 33 mtpy of liquefaction capacity is under construction at Qatar’s NFE expansion project. Additionally, the FEED work is underway on the NFS expansion project, which would add a further 16 mtpy.Regarding the pipeline trade within the Middle East, the Dolphin gas pipeline stands out as the largest in the region. Linking the North Field in Qatar to the UAE and Oman, this pipeline has a capacity of 33 bcm/year, operating at around 60% of this level.The potential for Qatar’s LNG exports envisions a growth of 2.6 times, reaching 208mn tonnes by 2050 from the current level of 77mn tonnes, with pipeline exports reduced from the present 20 bcm.The UAE participates in both the export and import of LNG, alongside pipeline gas imports. In 2022, the UAE exported 7 bcm of LNG and predominantly sourced gas imports from Qatar via the Dolphin gas pipeline, totalling 18.7bcm, GECF said.LNG exports are facilitated through the Das Island liquefaction plant in Abu Dhabi, possessing an overall capacity of 5.6Mtpy.By 2050, the UAE is projected to become a net exporter of LNG, with its overall LNG exports expected to reach 13Mt, starting with an increase from the current 5.5Mt after 2036.According to GECF, the primary destination for Middle Eastern LNG may continue to be Asia, with that region set to have an even more significant role in the long run.By 2050, the Asia Pacific region is poised to receive 186mn tonnes of LNG sourced from the Middle East, constituting over 90% of all LNG exported from that region, GECF said.

The Ras Laffan Industrial City, Qatar's principal site for the production of liquefied natural gas and gas-to-liquids. The North Field East LNG expansion project will be a major economic driver, first through "significant investment spending" until the (expected) completion date (2026) and then by fast-expanding LNG output, Allianz Trade has said in an economic update.
Business
Qatar’s vital role in LNG market, commitment to diverse sectors foster economic stability, growth: Allianz Trade

Qatar’s vital role in the global LNG market and commitment to diverse sectors, including sports and tourism, is fostering economic stability and growth, Allianz Trade has said in an economic update.The trade credit insurer noted that the North Field East LNG expansion project will be a major economic driver, first through "significant investment spending" until the (expected) completion date (2026) and then by fast-expanding liquefied natural gas output.As the first phase of the North Field East gas development project begins, the country's budget surplus will increase by 2026. With a strong fiscal outlook, public debt is expected to decrease from 45% of GDP at the end of 2023 to 33% by the end of 2028.Qatar’s low inflation, along with "progressive monetary relaxation", will also help to maintain private spending, while the government’s "emphasis on economic diversification will drive stable development" in non-energy sectors.According to Allianz Trade, “Qatar has one of the highest levels of GDP per capita in the world”, yet the economy relies significantly on hydrocarbon exports.GDP growth is expected to accelerate to 3% in 2024, Allianz Trade said. Investment in the energy sector, including renewables and fossil fuels, as well as a stronger tourism industry and better partnerships with neighbouring countries, will drive momentum.External liquidity will remain "unproblematic" in the next two years. Qatar has recorded large, sometimes huge, annual current account surpluses for more than two decades, with the exception of 2016 and 2020, when global oil and gas prices were particularly low.These surpluses have contributed to the buildup of the Qatar Investment Authority (QIA), the sovereign wealth fund, which is currently estimated at approximately $480bn.The combined international reserves of the central bank and the QIA represent over two times the annual GDP and cover more than 80 months of imports, Allianz Trade said.The economic acceleration reflects the government’s willingness to move forward with a variety of new infrastructure projects worth slightly less than $19.2bn. The Public Works Authority (Ashghal) will play a key role, as the projects cover many sectors and provide potential for private sector engagement.“We also expect the tourism industry to sustain its recent vibrancy – visitor arrivals more than doubled year on year in the first nine months of 2023, reaching 2.9mn. Qatar hosted the World Aquatics Championships in February.“Qatar has confirmed its ambitions as a worldwide athletic powerhouse and has also expressed interest in bidding for the summer Olympic Games in 2036,” Allianz Trade noted.

A view of the Ras Laffan Industrial City, Qatar's principal site for production of liquefied natural gas and gas-to-liquids (file). The upward trajectory of Qatar’s position as a leading global LNG exporter in 2022 indicates a growing momentum towards additional expansions or advancements post-2030s and 2040s following the North Field expansion projects, according to the GECF.
Business
Asia continues to be 'principal market' for Qatari LNG: GECF

Principal market for Qatari LNG continues to be Asia, accounting for 72% of its total supplies in 2022, Doha-based Gas Exporting Countries Forum (GECF) said in a report.Qatar accounted for 16% of European LNG imports in 2022, GECF said in its ‘Global Gas Outlook 2050’.In 2022, net gas exports from the Middle East amounted to 139 bcm. Projections indicate a significant surge in overall net exports to 292 bcm by 2050.In 2022, the Middle East contributed 96mn tonnes to global LNG exports, representing 25% of the total global LNG exports.Qatar secured the top position as the leading global LNG exporter, shipping 79mn tonnes, while Oman and the UAE exported 11mn tonnes and 5.5mn tonnes respectively.“Notably, Qatar supplied 16% of European LNG imports. However, Europe only represented 24% of Qatar’s overall LNG exports, while the principal market for Qatari LNG continued to be Asia, accounting for 72% of the total,” GECF said.According to the forum, the “primary force propelling natural gas exports” from the Middle East is set to be growth in LNG supplies, notably led by Qatar.The upward trajectory of Qatar’s position as a leading global LNG exporter in 2022 indicates a growing momentum towards additional expansions or advancements post-2030s and 2040s following the North Field expansion projects.With ambitions to increase its current capacity of 77mn tonnes per year by 64%, Qatar aims to reach 126mn tonnes per year through the North Field expansion by 2028.By 2050, LNG exports from the Middle East will reach 205mn tonnes, largely due to the expansion efforts in Qatar. Anticipated long-term LNG imports are predicted to reach 16mn tonnes by 2050.Consequently, the long-term outlook suggests an expansion of LNG net exports to reach 189mn tonnes. Primary destination for Middle Eastern LNG is expected to continue being Asia, with that region set to have an even more significant role in the long run.By 2050, GECF noted, the Asia Pacific region is poised to receive 186mn tonnes of LNG sourced from the Middle East, constituting over 90% of all LNG exported from that region.The region possesses 101mn tonnes per year of liquefaction capacity, primarily dominated by Qatar’s 77mn tonnes per year. Plans are in progress from 2022 to 2050 to add approximately 130mn tonnes per year of extra LNG liquefaction capacity to the region, with Qatar leading expansion efforts.The utilisation rate of this increased LNG liquefaction capacity is projected to be high, surpassing 90% by 2050, GECF said.

Gulf Times
Qatar
Qatar's nominal GDP forecast at $233.1bn this year and $246.1bn in 2025

Qatar's nominal GDP has been estimated to reach $233.1bn this year and $246.1bn in 2025, according to an Emirates NBD forecast.The country's real GDP growth has been estimated at 1.7% this year and 2.2% in 2025, according to the regional banking group.Emirates NBD forecasts Qatar's current account (as a percentage of country's GDP) at 18.8% this year and 19.2% in 2025.The budget balance (as a percentage of country's GDP) has been estimated at 4.2% this year and 4.7% in 2025.In its regional outlook for 2024 issued in January, Emirates NBD had noted global growth is expected to slow slightly to 2.9% from 3.0% in 2023 as tight monetary policy continues to weigh on demand and investment, particularly in the first half of the year.This scenario is consistent with softer demand for oil, particularly in the advanced economies, and oil GDP growth in the GCC region will remain a drag on headline GDP growth in 2024. Emirates NBD expects oil prices to average $82.5/b this year, similar to 2023.However, it thinks non-oil growth will remain relatively robust, averaging 3.6% across the GCC in 2024, underpinned by continued investment as oil exporting countries push ahead with ambitious economic diversification programmes. While government expenditure growth will likely be more modest in 2024 than over the last couple of years, it does not expect governments to cut spending or tighten fiscal policy through higher taxes (other than those already announced such as the UAE’s corporate income tax, which came into effect in mid-2023).In addition, economic and social reforms are likely to support continued private sector investment, and growth in the expatriate population, particularly in Saudi Arabia and the UAE.Rate cuts from the US Federal Reserve, expected in H2, 2024, should also boost demand for credit and support investment and consumption.The budget surpluses enjoyed in 2022 narrowed sharply last year on oil production cuts and lower oil prices, while spending increased. With little rebound in oil revenues expected in 2024, governments will need to rein in spending growth to prevent budget balances shrinking further, the report said.“We expect Saudi Arabia to run a deficit of -4.3% of GDP this year, up from -1.9% in 2023, as ambitious development plans will require continued investment spending. Bahrain and Kuwait are also likely to run small deficits this year, but Oman, the UAE and Qatar are expected to record surpluses.“Overall, sovereign balance sheets in the GCC are much stronger than a few years ago, with lower public debt and healthy FX reserves, which should allow governments to tap capital markets at attractive rates, if needed,” Emirates NBD noted.

A worker prepares gasoline hoses from a Petroleo Brasileiro truck to refuel a plane at Brasilia-Presidente Juscelino Kubitschek International Airport (file). Uncertainties on jet fuel price remain as demand for aviation gasoline or avgas is expected to rise ahead of the summer travelling season although signs of global economic slowdown may temper consumption and weigh on jet fuel limiting price upside.
Business
Airlines set to consume nearly 100bn gallons of jet fuel this year amid uncertain avgas price

Uncertainties on jet fuel price remain as demand for aviation gasoline or avgas is expected to rise ahead of the summer travelling season although signs of global economic slowdown .text-box { float:left; width:250px; padding:1px; border:1pt white; margin-top: 10px; margin-right: 15px; margin-bottom: 5px; margin-left: 20px; }@media only screen and (max-width: 767px) {.text-box {width: 30%;} } **media[154984]** may temper consumption and weigh on jet fuel limiting price upside. Some analysts see a spike in demand for jet fuel ahead of the summer travelling season in the third quarter of the year. Global jet fuel prices are likely to be "higher by 5.4% over our previous forecast to $111/barrel as soft demand is expected to give way to peak summer travel and stronger prices", BMI analysts wrote in a client note according to Reuters. "However, a global economic slowdown will temper consumption of air travel and weigh on jet fuel prices limiting price upside," they added. Latest fuel price analysis by the global body of airlines- IATA show the global average jet fuel price increased by 1.5% to $107.86/bbl in the week ending March 15. Fuel price is expected to average $113.8/barrel (jet) in 2024 translating into total fuel bill of $281bn billion, accounting for 31% of all operating costs, IATA said and noted airlines are expected to consume 99bn gallons of fuel in 2024. High crude oil prices are expected to continue to be further exaggerated for airlines as the crack spread (premium paid to refine crude oil into jet fuel) is expected to average 30% in 2024. Industry CO2 emissions in 2024 are expected to be 939mn tonnes from consumption of about 99bn gallons of fuel. In this context, IATA says the aviation industry will increase its use of Sustainable Aviation Fuels (SAF) and carbon credits to reduce its carbon footprint. IATA estimates that SAF production could rise to 0.53% of airlines’ total fuel consumption in 2024, adding $2.4bn to this year’s fuel bill. In addition, the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) is a global market-based carbon offsetting mechanism designed to stabilise international aviation emissions. The CORSIA-related costs are estimated at $1bn in 2024. The price of jet fuel has a significant impact on airfares, as it is one of the most substantial operating costs for airlines. Jet fuel is a major expense that directly influences an airline's profitability and pricing strategy and accounts for up to 20% of an airline’s operating expenses. Higher fuel costs jack up ticket prices, and conversely, airfare drops with lower fuel costs. A lower fuel burn-per–hour rate reduces the cost of flying an aircraft. The less it costs to fuel an aircraft, the more airlines can reduce ticket prices, obviously attracting more travellers. The impact of jet fuel prices on the cost of airline travel can be significant, as fuel typically represents one of the largest expenses for airlines. When jet fuel prices rise, airlines often need to adjust their ticket prices to compensate for the increased operating costs. This invariably results in higher airfares for passengers. The elasticity of demand for air travel affects how airlines adjust ticket prices in response to changes in fuel costs. If demand for air travel is relatively insensitive to price changes (i.e., demand is inelastic), airlines may be able to pass on a larger portion of increased fuel costs to passengers without experiencing a significant decline in ticket sales. Some airlines use hedging strategies to lock in fuel prices at a fixed rate for a certain period. This provides them with a degree of protection against sudden increases in fuel prices, although it also limits their ability to take advantage of price decreases. While rising jet fuel prices generally lead to higher operating costs for airlines, the extent to which these costs are passed on to passengers in the form of higher ticket prices vary depending on a range of factors, including fuel efficiency, hedging strategies, market competition, and demand elasticity. Pratap John is Business Editor at Gulf Times. Twitter handle: @PratapJohn