Despite COVID-19, fuel costs still represent a huge cost driver for airlines. However, we wanted to know the details. That’s why we searched available resources for interesting facts about airline fuel costs. And here’s the result: 7 surprising facts about airline fuel costs!
Fact #1 — On Average Fuel Costs Account For 26% Of An Airline’s Total Expenditures
Let’s start with the most impressive figure. On average, airline fuel costs account for one-quarter of their total expenditures. However, and as you can see in the below chart, the figure is highly variable. With more than 30% in 2012 and 2013, the number decreased steadily and reached 19.1% in 2016. In 2018 and 2019, the costs rose again to ~23%. As a direct result of COVID-19 2020, expenses are likely to reach an all-time low with only 15%.
Fact #2 — In 2019, Airlines’ Fuel Bill Totalled $188 Billion
To make fact #1 more tangible, we researched the total fuel spendings airlines faced in 2019. And here’s the result: In 2019 airline fuel costs totaled $188 Billion (Source: IATA). That definitely reflects a considerable amount of money. Need a comparison? Jeff Bezos, the richest man in the world with $200 Billion, could pay airlines’ fuel bills for a bit more than a year.
Fact #3 — Average Fuel Costs Of A Single Flights Is $7,000
Let’s break down the massive number of $188 Billion and have a look on single flights. On average, an airline faces fuel costs of $7,000 for a single flight. Of course, this highly depends on the type of flight. Fuel costs for long-haul flights quickly exceed $10,000, whereas short-haul flights can be operated with $4,000.
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Fact #4 — Fuel Efficiency Improved By 53% Last 30 Years
This really is a fantastic figure. Actually, it is no secret that airlines invested immense sums in improving fuel efficiency and reducing fuel costs. Modern, more fuel-efficient aircraft, improved processes are just a few examples of investments. As a result, airlines’ fuel efficiency steadily improved, ending with a decrease of 53% in fuel costs (2018 compared to 1990). Without implemented fuel measures, airline fuel costs in 2019 would have exceeded $280 Billion! Or in other words: Fuel-efficiency measures saved airlines more than $90 Billion in 2019.
Fact #5 — Norwegian And WizzAir Operate The Most Fuel Efficient Flights
There are many statistics concerning the fuel efficiency and sustainability of airlines. Moreover, depending on the calculation model, the results are also slightly different. However, we want to present two exciting figures about Norwegian and WizzAir — both airlines that are considered most fuel-efficient at the moment. Both Norwegian and Wizzair state that they operate flights with 2.27 L/100 km per passenger consumption.
Fact #6 — Fuel Prices Massively Vary Between Regions, Countries, And Airports
Okay, let’s start with the less-surprising fact: There’s not one single worldwide fuel price. On the contrary, similar to gas stations, fuel prices differ widely. On average, South America is considered as the most expensive, followed by North America. Middle East airports usually are on top of the cheapest airports in terms of fuel. However, fuel prices also differ between airports in the same country. That’s why —especially on short-haul flights— airlines regularly apply the tankering concept.
Fact #7 — $4 Billion — Biggest Ever Achieved Savings Through Fuel Hedging
We can’t confirm this number 100% since not all airlines provide details about their fuel hedging activities. Nevertheless, many resources state that Southwest Airlines is the king of fuel hedging. Their very aggressive fuel hedging measures between 1999 and 2008 helped Southwest Airlines to save more than $4 Billion. Although we can’t confirm that there’s no other airline that has done better, the approach was definitely a success for Southwest’s CFO. After 5 years of successful hedging, he was appointed CEO in 2004.