Between 2001-2005, airline fuel consumption led the price of fuel by around 3 months (see below) in a classic case of demand driving the price. Since mid-2005 this relationship has broken down and over the past six months or so the two have diverged with the cost of fuel rallying ~60%
YoY.
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgliWnRYEdFzVv4mPo1l2Rdl-lyYZSEGMuSw0kKv1Xu4jt6NrE1Dc8NQZ-MiLIs-CHeqoa6oJIp-MMC-SO_oV4Od-I9pZ-Q5b-80eRgnVUIrIDmOssebFggEmizVtzEmDJRHD_Xj0QcHd4/s400/airline2.png)
I expect the relationship to re-emerge and I suspect it won't be due to an increase in consumption.
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