Why are the commercial aircraft we fly on today becoming increasingly older?

Why Jet Fuel Prices on the U.S. West Coast Have Surged to the Highest Levels Among Major Global Markets Despite the United States Being a Net Crude Oil Exporter

Although the United States is overall a net exporter of petroleum products, including jet fuel, its West Coast is facing a severe spike in jet fuel prices, which have even surged to the highest levels among major global markets . The core reasons behind this are the cascading effects on global refining chains triggered by geopolitical conflicts, coupled with the unique structural vulnerabilities of the U.S. West Coast.

Structural Dependence of the West Coast on East Asian Imports: Although the United States is a net exporter of petroleum products (including jet fuel) at the national level, the U.S. West Coast remains structurally highly dependent on jet fuel imports from East Asia (such as China and South Korea) . Due to the vast transcontinental distances within the United States and hard bottlenecks in domestic logistics and pipeline transportation, abundant production capacity from inland regions or the U.S. Gulf Coast cannot be delivered to the West Coast at low cost .

Given that the United States itself is a net exporter of crude oil and refined products, why can’t it simply transport jet fuel from inland and Gulf Coast regions via domestic pipelines or rail to…

Although the United States is overall a net exporter of crude oil and petroleum products (including jet fuel), its West Coast cannot directly leverage domestic pipelines or railways to allocate resources from the U.S. Gulf Coast and inland regions at low cost.

Based on the facts and logic presented in the research report, the underlying causes of this phenomenon lie in severe physical fragmentation, transoceanic linkages within global supply chains, and the lack of hedging strategies by airlines themselves.

Candid Clarification: ‘Logistics Constraints’ and Unelaborated Details in the Research Report: The report explicitly notes that even in net-exporting regions, refined product markets can see established supply chains disrupted due to ‘logistics constraints,’ leading to acute regional price mismatches . A Logistical ‘Island’: The U.S. West Coast has long been structurally and heavily dependent on jet fuel imports from East Asia .

How the Elimination of the U.S. De Minimis Exemption Unexpectedly Caused Massive Diversion of Asian Air Cargo to Europe

The elimination of the U.S. de minimis duty-free threshold and the implementation of protectionist tariff policies have directly disrupted traditional cross-border air freight routes from the Asia-Pacific region to North America, unexpectedly triggering a major structural rerouting of global air cargo flows .

Sharp Decline in Cargo Volumes on North American Routes: Previously, large volumes of small-parcel cross-border e-commerce shipments from Asia (especially China) relied on the U.S. de minimis policy to enter the United States quickly and duty-free via air . Following the elimination of this duty-free exemption and changes in tariff policies, both the volume and market share of air cargo on Asia-to-North America routes have plummeted dramatically, falling to historically low levels .

Goods Forced to Seek Alternative Markets: Faced with steeply rising U.S. tariff barriers, large quantities of Asian export goods and cross-border e-commerce parcels originally destined for the United States have been forced to seek new outlets, with most being rerouted toward European markets .

With Large Volumes of Asian Goods Rerouted to Europe Due to U.S. Policy Changes, How Will New EU E-Commerce Regulations Set to Take Effect This Summer Further Impede This Surge in Cargo…

New EU e-commerce regulations set to take effect in the summer of 2026 will impose direct resistance on this surging wave of cross-border e-commerce freight through tighter customs requirements for low-value shipments .

Directly Suppressing Growth Potential on Asia-Pacific–Europe Routes: Against the backdrop of airspace restrictions caused by Middle East conflicts and the elimination of the U.S. de minimis policy, Asia-Pacific-to-Europe routes already account for more than three-quarters of all incremental cargo volumes associated with the Asia-Pacific region . However, the International Air Transport Association (IATA) has explicitly warned that these upcoming European regulatory changes taking effect this summer could place heavy pressure on overall cross-border e-commerce cargo volumes, thereby limiting the long-term growth potential of this critical Asia-Pacific–Europe freight corridor .

Significant Increases in Logistics Lead Times and Compliance Costs: The new policy imposes stricter customs clearance procedures on low-value parcels (which previously typically enjoyed expedited and simplified clearance), meaning that the previous model of rapid customs processing via fragmented direct-mail parcels will face more cumbersome declaration processes and higher inspection rates .

Why is the African aviation market expected to see a strong 10% passenger growth in 2026, yet its industry-wide profit margin remains a meager 0.2%?

The African aviation market in 2026 presents an extremely contradictory and divided picture: on one hand, driven by route diversions caused by conflicts in the Middle East, African air passenger demand (measured by Revenue Passenger Kilometers, RPK) is expected to grow strongly by 10.0% (up from 9.8% in 2025) ; but on the other hand, its industry-wide net profit margin is projected to plummet to a negligible 0.2%, with net profits shrinking from $300 million in 2025 to just $100 million . This means that the net profit earned per passenger by African airlines will drop sharply from $2.10 to a mere $0.40 .

This awkward situation of “surging traffic but bottomed-out profits” is jointly caused by deep-seated structural ailments and extreme cost pressures within the African aviation market:

The explosion in African aviation traffic is largely attributable to route re-routing brought about by geopolitical conflicts .

Given that the operating cost per ton-kilometer for African aviation is as high as 140 cents, nearly twice the global average, what are the extreme local factors…

According to industry research reports, the average operating cost per Available Ton Kilometer (ATK) for African airlines is as high as nearly 140 cents, almost twice the global average . While traffic sees double-digit growth, such high costs directly suppress the African aviation industry’s overall profit margin to a freezing point of only 0.2% .

The extreme local factors driving up this unit cost mainly stem from the following deep-seated structural ailments:

The heaviest tax burden and administrative costs globally African airlines face an exceptionally high policy and administrative cost system worldwide: High corporate taxes: African airlines face the highest corporate income tax rates among all global regions, averaging as high as 28% .

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Source institutions：International Air Transport Association (IATA)

This content is for reading and understanding research reports. It does not constitute investment advice or trading signals.