To Fly or Not to Fly? That is the Question

Liberal talk show host Steven Colbert pretty well captured the whole callous disconnect between this nation’s green zealots and Americans paying all-time record high gas prices at the pump.  By now, many Americans have heard Colbert’s patronizing retort:

Today, the average gas price in America hit an all-time record high of over $4 per gallon.  Okay, that stings, but a clear conscience is worth a buck or two.  I’m willing to pay.  I’m willing to pay $4 a gallon.  Hell, I’ll pay $15 a gallon because I drive a Tesla.

President Biden would further lecture us to make it all sound so simple when he recently tweeted:

Transforming our economy to run on electric vehicles, powered by clean energy, will mean that no one will have to worry about gas prices.

Really?  “No one will have to worry about gas prices.”  Cars and trucks aside, maybe Colbert, President Biden, and other luminaries of the green climate lobby shouldn’t plan to travel anywhere on an airline in the future -- or need products from other key industries -- if the present upward trend in oil prices continues and this administration presses its bid to sabotage the U.S. oil and gas industry.

In the case of air travel, an electric airliner does not exist.  There are no feasible, practical options for aircraft engines on the far horizon that don’t burn jet fuel.  There are no workable wind, solar, or battery -- or any green -- options for aircraft engines that will replace the jet engine anytime soon.  Are more fuel-efficient engines on the horizon?  Absolutely, but even those engines must burn jet fuel -- still in relatively large quantities -- and that fuel is fossil fuel.  That’s a fact; that is the “science” of even the most fuel-efficient modern jet airliners.

So, airlines are one industry that “worry about gas prices” since fuel can make up to a third of airlines' total operating expenses and vie with labor as an airline’s biggest outlay.  This cost for airlines is set to rise dramatically as the price of crude oil has increased a staggering 53% this year from $75 per barrel in January to as much as $115-118 per barrel recently.  Correspondingly, over the course of a year, jet fuel prices have also steadily increased, beginning in 2021 at near $1.50 per gallon and then starting in 2022 at around $2.46 per gallon.  Based on this year’s further rise in oil prices, U.S. jet fuel has already touched $4.00 per gallon and ranged in the $3.00-plus area -- up from that $2.46 per gallon at the start of 2022.  That price rise is the difference between an airline paying nearly $11,000 in fuel costs for 5,325 gallons (at roughly $2.00 per gallon) for that notional daily New York to LA flight in 2019 versus $16,000 (or more) today at $3.00-plus per gallon.

If rising fuel prices weren’t enough, over the past couple of years, the COVID crisis created a turbulent situation for many companies and industries.  Some, such as the airlines, took a much larger hit than others as travel demand collapsed worldwide.  Just as it appears that era is ending as U.S. COVID case growth has fallen back to low levels, mask mandates are ending, and large numbers of people seek to renew their old travel habits, it looks as if airlines may leave one crisis badly bruised financially but enter a new one with jet fuel costs at record levels.

Along with numerous other industries, U.S. airlines also face inflationary pressures across several cost categories (e.g., labor, fuel, maintenance, rents, landing fees).  Collectively, they are expected to lose money (~$3-4B pretax) in 2022, while debt and interest expenses will remain elevated through at least 2024.  Any further large increases in fuel prices could exacerbate their precarious financial positions coming out of the pandemic.

Even during the pandemic, domestic airlines accounted for approximately five percent of annual U.S. Gross Domestic Product (GDP) while driving some $1 trillion in total economic activity and supporting nearly 730,000 jobs.  The nation can ill afford for this amount of economic activity generated by airlines to remain depressed or absent.

Airlines are but one big example of an industry depending not only on a robust U.S. oil and gas industry but also on stability in oil prices as well.  Other major industries similarly concerned with -- if not outright “worried about” -- the price of oil include agriculture, chemicals, plastics, and medical expenses.  Each industry can make its own similar case on the importance -- at least for coming decades -- of fossil fuels and their reliance on the U.S. fossil fuel industry.

The dismissal and disregard by the Biden administration of the still vital role oil and gas must play in the U.S. economy should not be allowed to -- pun intended -- “fly” in Washington.  For this nation and Americans to continue to derive the benefits of global air travel -- and yes, drive their cars and trucks -- along with enjoying the many other products U.S. industries make with oil and gas, then President Biden and his administration must worry about the oil and gas industry’s role in the vitality and prosperity of this nation for many years to come. 

Chris J. Krisinger (Colonel, USAF Ret) served in policy advisory positions in both the Pentagon and the State Department.  He was a National Defense Fellow at Harvard University.  He has family members employed in the airline industry.

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