Southwest shipped jet fuel from Texas to California amid supply crunch
Southwest Airlines utilized a rare Jones Act waiver to ship jet fuel from Texas to California to address supply shortages and high prices. The move highlights the volatility of fuel costs and the logistical challenges facing U.S. carriers.
Why it matters
Airlines are increasingly sensitive to fuel price spikes caused by geopolitical tensions, which directly impact operational costs and ticket pricing.
Southwest Airlines hired a ship this spring to send jet fuel from Texas to California, where prices are much higher and concerns had grown about supply, Chief Financial Officer Tom Doxey told CNBC. It was a first for the Dallas airline.
"It brought like a week's supply to the West Coast at a time when when supply was most constricted ... when it was most at risk," Doxey said.
The ship, which left from Houston and went through the Panama Canal, arrived May 28 in Los Angeles and had about 12.6 million gallons aboard, Southwest said. For context, Southwest used 564 million gallons of jet fuel in the last quarter .
The West Coast is much more reliant on imports than other parts of the country. Jet fuel prices spiked and have been volatile since the U.S. and Israel struck Iran in February.
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