LOW FUEL CONSUMPTION AND ITS IMPACT ON THE COST OF AIRLINE OPERATIONS

Given the relevance of the air transport system for the economy, it is important that industry and policy makers are aware of changes and likely future impacts driven by increased fuel prices

- ANIL CHOPRA

AS PER INTERNATIONAL AIR Transport Association (IATA), the global airline industry’s fuel bill was $188 billion in 2019, accounting for around 23.7 percent of operating expenses at an average price of $65 per barrel Brent. This was an increase of 4.7 percent over 2018 and is almost 50 percent more than the $127 billion fuel bill for 2006, which accounted for 28.4 percent of operating expenses at $65.1 per barrel Brent. In 2020, the fuel bill was forecast to be $182 billion, accounting for 22.1 percent of operating expenses at around $63 per barrel Brent. However, the COVID-19 hit the industry hard, and expense and earning calculations got upset.