Global airline fuel spending has been steadily increasing after a significant decline due to the COVID-19 pandemic, and is poised to set a new record this year. According to Stocklytics.com, the global airline industry is projected to spend a staggering $291 billion on fuel in 2024, a $100 billion increase from five years ago. While it’s common for one of the world’s largest fuel consumers to spend hundreds of billions of dollars annually, airlines today are paying significantly more for the same amount of fuel compared to five years ago. This substantial price disparity is highlighted in the latest Air Transport Global Outlook by the International Air Transport Association (IATA).
In 2019, airlines globally consumed 96 billion gallons of fuel, costing them around $190 billion. The pandemic caused a near 50% drop in these figures, with fuel spending plummeting to $80 billion in 2020. Despite a challenging 2021, the market rebounded in 2022. As air travel normalized, the industry’s fuel usage rose to 77 billion gallons, with total fuel spending reaching $215 billion, a 13% increase from pre-pandemic levels. This upward trend continued over the past two years. However, the IATA survey revealed a concerning pattern: while global airline fuel usage has almost returned to 2019 levels, fuel prices have not. As a result, airlines are paying considerably more for the same fuel volume. Projections indicate that the same fuel volume in 2024 will cost $100 billion, or 53% more than in 2019.
This significant increase means fuel expenses will account for approximately 32% of airlines’ total spending this year, a 7% rise from five years ago. This dramatic increase is largely attributed to the ongoing conflicts involving Russia, Ukraine, Israel, and Palestine, which have sharply driven up gasoline and jet fuel prices. With these conflicts showing no signs of resolution, fuel prices are expected to rise even further next year.
While 2024 will witness the highest fuel costs in the airline industry’s history, this surge could be offset by highly optimistic market projections. IATA data shows that total traffic matched and surpassed 2019 levels in February this year and has been growing ever since. With global flight demand rising, the number of airline passengers is expected to reach nearly five billion by the end of 2024, 400 million more than before the pandemic. In addition to achieving a record number of passengers, the airline industry is also set to generate unprecedented revenue. Statistics indicate that global airline industry revenue will approach one trillion dollars in 2024, $158 billion more than in 2019.
