Stop crying about the price of Jet A1.
The narrative currently circulating through the Saskatchewan aviation sector is predictable, lazy, and fundamentally wrong. You’ve seen the headlines. Operators are "battling" costs. Global uncertainty is "stifling" growth. The war in Ukraine is a "catastrophe" for the regional balance sheet.
It is a comfortable lie. It allows mediocre management teams to point at a Bloomberg terminal and shrug when their quarterly margins look like a crime scene. But here is the reality: high fuel prices are the most effective filter for incompetence ever devised.
If your business model depends on oil staying at $70 a barrel to remain solvent, you don’t have a business. You have a subsidized hobby.
The Myth of the Fuel Victim
The standard industry complaint is that fuel constitutes 30% to 40% of operating costs, and therefore, a price spike is an external "attack" on the industry. This perspective treats fuel as a static variable.
Smart operators know better. Fuel isn't a cost to be managed; it is a signal.
When fuel prices rise, it forces an immediate, brutal audit of route efficiency. For years, Saskatchewan operators have clung to legacy routes and "thin" schedules that only made sense because fuel was artificially cheap. These routes are zombies. They eat capital, they waste pilot hours, and they degrade the long-term health of the fleet.
High prices act as a Darwinian pressure. They force you to cut the fat that you should have cut three years ago. The operators currently whining in the press are the ones who failed to modernize their fleets when money was cheap. They are the ones flying airframes with the fuel efficiency of a leaky bucket.
Hedging is Not a Strategy
You will hear "experts" talk about fuel hedging as the savior of the regional airline. This is another delusion.
Hedging is just gambling with a more expensive suit on. Unless you are an airline the size of Delta or Southwest with a dedicated desk of commodities traders, you are almost certainly going to get the timing wrong. For a mid-sized operator in Saskatoon or Regina, hedging is often just a way to lock in a loss.
I have seen regional carriers blow millions of dollars on hedge contracts because they were terrified of "uncertainty." Meanwhile, the guy who stayed nimble and focused on high-load factors ate their lunch.
Don't hedge the fuel. Hedge the business.
- Optimize the Load: If the plane isn't 85% full, it shouldn't be in the air.
- Dynamic Pricing: If you aren't adjusting ticket prices in real-time based on the daily spot price of crude, you aren't a tech-forward company; you're a dinosaur.
- Maintenance as Efficiency: A dirty engine or a poorly rigged flight control surface increases drag. Drag is just another word for burning money.
The False Idol of Government Subsidies
Whenever the price at the pump goes up, the first instinct of the Saskatchewan aviation lobby is to run to the provincial or federal government for a handout. "Essential services," they cry. "Northern connectivity," they plead.
Subsidies are a slow-acting poison. They insulate you from the reality of the market. They allow you to ignore the fact that your operational infrastructure is obsolete.
When the government cuts a check to "offset fuel costs," they are essentially paying you to stay inefficient. They are keeping the "lazy consensus" alive. The result? Five years from now, your competition will have invested in carbon-efficient propulsion or more aerodynamic airframes, while you’ll still be flying the same thirsty birds, waiting for the next bailout.
The Real Problem is Not the War
Blaming global uncertainty or the war in Ukraine for local operational failures is a masterclass in deflection.
Yes, the crack spread—the difference between the price of crude oil and the price of refined products like jet fuel—has widened. Yes, supply chains are strained. But these are global constants. Every operator in the world is dealing with them.
The reason some Saskatchewan operators are "battling" while others are "thriving" isn't the war. It's the fleet.
Saskatchewan has a sentimental attachment to aging turboprops. We love the ruggedness. We love the history. But the physics of a 35-year-old engine do not care about your nostalgia.
$$F = \frac{T \cdot TSFC}{V}$$
In this simplified relation for fuel flow ($F$), your Thrust Specific Fuel Consumption ($TSFC$) is the killer. Modern engines have slashed this variable through higher bypass ratios and better metallurgy. If you are flying old iron, you are paying a "legacy tax" every time you throttle up. High fuel prices simply make that tax impossible to ignore.
The Opportunity in the Crisis
While the laggards are busy writing op-eds about how hard things are, the predators are looking at the map.
High fuel prices kill off the weak competition. They clear the "landscape"—to use a word I despise—of the noise. When a competitor shuts down a route because they can't afford the fuel, that market share doesn't vanish. It migrates.
This is the time to be aggressive.
- Aggressive Fleet Replacement: Use the high-cost environment to justify the capital expenditure for newer, more efficient aircraft. The ROI is never clearer than when fuel is at a premium.
- Talent Acquisition: When the "victim" airlines start cutting staff to save pennies, hire their best pilots and mechanics.
- Data Over Intuition: Stop letting "gut feeling" decide your fuel stops. Use flight planning software that calculates the exact trade-off between carrying the weight of extra fuel (tankering) versus buying at a more expensive out-station.
Why You Should Hope Prices Stay High
If fuel prices drop tomorrow, the industry will go back to sleep. The inefficiencies will be papered over. The mediocre operators will survive another year.
But if prices stay high, the industry will be forced to evolve. We will see the rise of more efficient regional hubs. We will see the acceleration of electric and hybrid-electric short-haul flights—tech that is perfect for the "puddle-jumper" routes of the prairies.
The "Saskatchewan battle" isn't against the price of oil. It's against the internal resistance to change.
Stop looking at the ticker and start looking at the hangar. The solution to high fuel costs isn't cheaper fuel. It's a better airline.
Adapt or get out of the cockpit.
