Aviation propulsion: Unit economics
Why a fuel price spike squeezes airline margins to 2%
What this tab covers What it costs to move a unit of energy this way: capital and operating costs, tariffs, utilisation and how it compares with the alternatives.Fuel is the largest single airline cost: 25% of operating costs in 2025 and a forecast 31% in 2026 after a jet fuel price spike. A typical passenger-km burns about 3.6 litres per 100 km and costs 2-3.5 US cents in fuel.
Key costs
| Measure | Value | Note |
|---|---|---|
| World airline fuel bill | 252 (2025); 350 (2026 forecast) billion USD4 | Nominal USD. |
| Fuel share of airline operating costs | 25.4% (2025); 31.4% (2026 forecast)% of operating cost4 | |
| Jet fuel price | 90 (2025 average); 152 (2026 forecast) USD per barrel4 | 2026 crack spread about 57 USD per barrel, a record. |
| SAF price assumed by IATA | 2,872 USD per tonne (2026)5 | About 374 USD per barrel, roughly 2.5 times fossil jet fuel at the 2026 forecast price (calculated). The SAF premium adds about 4.3 billion USD to 2026 fuel costs. |
| Fuel burned per passenger-km | about 28.5 g, or 3.6 litres per 100 passenger-km (calculated) 2 | From 90 g CO2 per passenger-km (2019); 3.16 kg CO2 per kg fuel and 0.8 kg per litre assumed. |
| Fuel cost per passenger-km (calculated) | about 2.0 (2025) to 3.4 (2026) US cents24 | 3.56 litres per 100 km at 90 and 152 USD per barrel (159 litres per barrel). |
| Airline net margin | 4.2% (2025); 2.0% (2026 forecast)% of revenue4 | Revenue 1.165 trillion USD in 2026. |
Where the money goes
| Item | Share or amount |
|---|---|
| Fuel | 25.4% (2025) to 31.4% (2026) of operating cost4 |
| Everything else (aircraft ownership, crew, maintenance, airport and navigation charges, sales) | about 69-75% (calculated remainder)4 |
Worked example (calculated): a 1,000 km trip burns about 36 litres of fuel per passenger at the 2019 world-average efficiency. At the 2026 forecast price of 152 USD per barrel (0.96 USD per litre) that is about 34 USD of fuel per passenger; at the 2025 average of 90 USD per barrel it was about 20 USD. Because fuel is a quarter to a third of airline cost, each 1% cut in fuel burn saves roughly 0.25-0.3% of total cost, which is why airlines pay for new engines that use 15-20% less fuel.
Energy scale (calculated): 104 billion US gallons is about 394 billion litres, or roughly 315 million tonnes and 13.5 EJ of jet fuel a year.