Jet fuel forms the main raw material used in the airline industry. The demand for petroleum and
related products has historically been cyclical and sensitive to the availability and prices of oil and
related feedstock. Historically, international prices of crude oil and refined products have fluctuated
widely due to many factors that are beyond the control of companies like Cathay Pacific. Fuel prices
and its availability are subject to wide price fluctuations based on geopolitical issues and supply and
demand, which can neither be controlled nor accurately predicted. For instance, in December 2011,
the jet fuel price was recorded at $124.2 per barrel, as compared to $112.9 per barrel in January
2011. Furthermore, the political turmoil in the Middle East has raised the oil prices. As the jet fuel
prices account for a major portion of the operational expenses, the situation would result in a reversal
of fortune for global airlines