Oil and Gas

American Airlines warns pilots of fuel shortages, cites logistical issues

July 26 (Reuters) - American Airlines told pilots to conserve jet fuel supply when possible in a memo on Monday, saying that transportation logistics, including lack of trucks and drivers, is delaying supply to airports throughout the United States.

Fuel prices have been on the rise for several months as demand for gasoline and diesel has snapped back after the worst of the coronavirus pandemic. Refiners have ramped up processing in the last several months to respond to the recovery in fuel demand, but logistics companies have complained of a lack of available drivers.

“American Airlines station jet fuel delivery delays initially affected mostly western U.S. cities, but are now being reported at American stations across the country. Delivery delays are expected to continue through mid-August,” the memo said.

Gasoline, diesel and jet fuel demand plunged in 2020 due to the coronavirus pandemic, but air travel has rebounded more slowly than other modes of transportation, so refiners have been shipping less jet fuel.

As of mid-July, refiners shipped roughly 1.4 million barrels of jet fuel on a daily basis, which is still about 22% below 2019 levels, according to the U.S. Energy Department. By contrast, gasoline supplied by refiners in mid-July nearly matches 2019’s level.

American, in a statement, said it was aware of fuel supply issues at some airports. “American is currently experiencing minimal operational impact due to fuel supply issues. Our team continues to work around the clock to monitor the situation and minimize the impact on our customers,” it said.

Industry group Airlines For America said that carriers are having aircraft take extra fuel at non-affected airports to offset problems with fuel supply.

U.S. domestic leisure travel has nearly recouped 2019 levels, and American has said it sees domestic business travel fully recovering next year.

Reporting By Tracy Rucinski; writing by David Gaffen; editing by Chris Reese