After a sharp decline due to the COVID-19 pandemic, global airline fuel expenditures have been steadily increasing and are poised to reach a new high this year.
According to data from Stocklytics.com, the airline industry is projected to spend $291 billion on fuel in 2024, a $100 billion increase compared to five years ago.
$100 Billion More for the Same Fuel Amount
While it’s common for major fuel consumers like airlines to spend billions annually, the cost for the same quantity of fuel has surged significantly over the past five years. The International Air Transport Association (IATA) reports a substantial price increase.
In 2019, airlines consumed 96 billion gallons of fuel, costing approximately $190 billion. However, this figure plummeted to $80 billion in 2020 due to the pandemic. Following a challenging 2021, the industry rebounded in 2022, with fuel usage rising to 77 billion gallons and total spending reaching $215 billion—a 13% increase from pre-pandemic levels.
Despite a recovery in fuel consumption, the IATA survey highlights a concerning trend: while fuel usage is nearly back to 2019 levels, prices remain high. In 2024, the cost for the same fuel volume is expected to be $100 billion—or 53%—more than in 2019. Consequently, fuel costs are anticipated to account for about 32% of airline spending this year, up 7% from five years ago.
This dramatic increase is largely attributed to geopolitical tensions, including Russia’s war with Ukraine and the Israel-Palestine conflict, which have significantly driven up fuel prices. These conflicts are unlikely to resolve soon, potentially pushing fuel prices even higher in the future.
Record Revenue to Offset Fuel Costs
Although 2024 is set to see unprecedented fuel costs, optimistic market forecasts suggest that this could be offset by record industry revenue. According to IATA, global traffic surpassed 2019 levels in February and has continued to grow.
The total number of airline passengers is expected to reach nearly five billion by the end of 2024, an increase of 400 million from pre-pandemic figures. The industry is also anticipated to generate nearly $1 trillion in revenue, $158 billion more than in 2019.
