Strength of the Mexican peso drives down the price of jet fuel

The International Air Transport Association (IATA) has noted that the peso’s appreciation of about 15% against the dollar and a smaller regional increase in fuel prices have allowed Mexican airlines to face an 86% increase that is below the levels recorded in other markets.

IATA has noted that the peso's recent strength against the dollar has been one of the factors why Mexico was not as affected by the rise in fuel prices as other countries around the world.

The war in the Middle East has caused global jet fuel prices to rise by 121% year-over-year in April; however, not all airlines experienced the same increase in costs.

Mexican airlines saw only an 86% increase in currency terms. According to IATA, this is because the peso has appreciated by approximately 15% against the dollar—the currency predominantly used to purchase fuel—in addition to a less severe increase in the regional price of jet fuel.

Several countries experienced varying impacts due to the depreciation of the U.S. dollar. Brazil was one of the countries that benefited; Japan saw a 173% increase in fuel prices and a 10% depreciation of the yen; India saw prices rise by 170%; and the eurozone, with a stronger currency, limited the increase to 118%, while airlines in China faced a 132% increase in fuel prices in local currency, according to IATA.

Finally, the impact in the United States was 100%, while Saudi Arabia faced a 114% increase.