Southwest Airlines put Texas jet fuel on a boat to LA for the first time amid supply worries - CNBC

What the report says

CNBC reports that Southwest Airlines arranged an unusual fuel shipment this spring, chartering a vessel to move jet fuel from Houston to Los Angeles as the carrier prepared for possible supply disruptions on the West Coast. Chief Financial Officer Tom Doxey told CNBC the shipment was a first for the Dallas-based airline and was meant to provide roughly a week of supply when the region faced heightened risk of shortages.

According to CNBC, the ship traveled through the Panama Canal and reached Los Angeles on May 28 carrying about 12.6 million gallons of jet fuel. Southwest said it used 564 million gallons in the most recent quarter, giving scale to the shipment. The airline relied on a waiver of the Jones Act, the 1920 law that generally requires cargo moving between U.S. ports to sail on U.S.-built, U.S.-crewed and U.S.-flagged vessels.

The move came during a period of sharp fuel-market volatility. CNBC reported that West Coast fuel markets depend more heavily on imports than other U.S. regions, and that prices rose amid geopolitical tensions, shipping disruptions and export restrictions by some countries. Southwest said its second-quarter fuel expenses were nearly $900 million higher than a year earlier, though a spokesman said the immediate supply concerns have eased.

The episode underscores why fuel remains a major pressure point for airlines, second only to labor among large expenses. CNBC noted that carriers have trimmed capacity growth, while executives have said higher fares are likely to persist as demand holds up and fuel costs remain uncertain.