No airfare relief: Jet fuel supplies will take months to recover even if Strait reopened

The trade association for the world's airlines has warned that it will take months for jet fuel supply to recover even if Iran reopened the Strait of Hormuz.

This key shipping route for oil has been virtually shut down for weeks by the Middle East conflict, pushing up prices for crude and related products.

US President Donald Trump said on Tuesday that he'd agreed to suspend planned attacks on Iranian infrastructure for two weeks subject to the country agreeing to the "complete, immediate and safe opening" of the Strait.

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However, the temporary ceasefire is unlikely to provide immediate relief to the global aviation industry, cautioned the director general of the International Air Transport Association (IATA), Willie Walsh.

Even while crude oil prices are expected to fall, as they have started doing, jet fuel costs are likely to remain slightly elevated due to the impact on refineries, he said.

In conversation with Stephen Grootes, aviation analyst Guy Leitch reports that Walsh cited a delay of at least six months before supply gets back to normal simply because of the damage done to refineries in the Middle East.

Added to that is the lag time due to the weeks it takes for tankers to reach their destination.

What also counts against South Africa, is that our aviation industry is still one generation behind with its jets, which keeps costs higher.

"Basically, every time the generation switches, we get as much as a 15-20% increase in efficiency from the jet engines. So our aircraft are now much less efficient than their competitors. I'm thinking specifically here of SAA trying to get back onto international routes."

And while FlySafair for one has ordered new Boeings, these are still a long way from being delivered, Leitch adds.

"So the whole South African industry is going to be on the back foot for aother couple of years because of the impact of higher fuel prices".

Scroll up to the audio player to hear the full conversation with Guy Leitch