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Petroleum. New price increases for consumers' pockets

Risk of a new season of failure for airlines?

Starting today, the cost of all kinds of aviation fuel -and not- has increased by about 2%, also due to the decision of US President Donald Trump to impose the total embargo on Iranian export oil. A move, however, intended to raise the price of barrels of crude oil which will lead to the consequent increase in the cost of each type of fuel.

In addition to the increases that will affect all consumers, in the aviation sector this new price spike will cause a double impact: on passengers and on airlines. The former will probably soon find an increase in the price of airline tickets; the latter, on the other hand, will be those most affected by the increase in the cost of fuel because they will see economic revenues decrease. The real risk is that if these increases were confirmed, a new phase of bankruptcies could be opened in the sector, especially for those airlines that are more exposed or in a non-flourishing financial situation.

The exemptions to the embargo granted by the US administration to eight countries, including Italy, will end on May 1, but the first signs of the decision confirmed yesterday by Secretary of State Mike Pompeo have already arrived today. It remains to be seen whether this increase could affect Alitalia's sales process, also because the available cash made known by Stefano Paleari during the last hearing already relied on the money collected from the sale of tickets for the Summer season. The rise of the cost of fuel will not lead to an increase in the tariffs for those who have already bought the ticket, thereby reducing Alitalia's profit, in what promises to be a difficult problem to resolve.

M/A - 1221063

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