# Aviation propulsion: Unit economics

Why a fuel price spike squeezes airline margins to 2%

Source page: https://www.materialinsights.org/energy/e_aviation/economics/

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 USD^[4](https://www.iata.org/en/pressroom/2026-releases/06-07-middle-east-disruptions-high-fuel-prices-halve-airline-industry-profitability/) | Nominal USD. |
| **Fuel share of airline operating costs** | 25.4% (2025); 31.4% (2026 forecast)% of operating cost^[4](https://www.iata.org/en/pressroom/2026-releases/06-07-middle-east-disruptions-high-fuel-prices-halve-airline-industry-profitability/) |  |
| **Jet fuel price** | 90 (2025 average); 152 (2026 forecast) USD per barrel^[4](https://www.iata.org/en/pressroom/2026-releases/06-07-middle-east-disruptions-high-fuel-prices-halve-airline-industry-profitability/) | 2026 crack spread about 57 USD per barrel, a record. |
| **SAF price assumed by IATA** | 2,872 USD per tonne (2026)^[5](https://www.iata.org/en/iata-repository/pressroom/fact-sheets/fact-sheet-fuel) | 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](https://theicct.org/publication/co2-emissions-from-commercial-aviation-2013-2018-and-2019) | 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 cents^[2](https://theicct.org/publication/co2-emissions-from-commercial-aviation-2013-2018-and-2019)^[4](https://www.iata.org/en/pressroom/2026-releases/06-07-middle-east-disruptions-high-fuel-prices-halve-airline-industry-profitability/) | 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 revenue^[4](https://www.iata.org/en/pressroom/2026-releases/06-07-middle-east-disruptions-high-fuel-prices-halve-airline-industry-profitability/) | 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 cost^[4](https://www.iata.org/en/pressroom/2026-releases/06-07-middle-east-disruptions-high-fuel-prices-halve-airline-industry-profitability/) |
| **Everything else (aircraft ownership, crew, maintenance, airport and navigation charges, sales)** | about 69-75% (calculated remainder)^[4](https://www.iata.org/en/pressroom/2026-releases/06-07-middle-east-disruptions-high-fuel-prices-halve-airline-industry-profitability/) |

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.

#### Sources

1. [CO2 emissions from commercial aviation: 2013, 2018, and 2019](https://theicct.org/publication/co2-emissions-from-commercial-aviation-2013-2018-and-2019) ICCT, 2020
2. [Middle East disruptions and high fuel prices halve airline industry profitability (industry outlook)](https://www.iata.org/en/pressroom/2026-releases/06-07-middle-east-disruptions-high-fuel-prices-halve-airline-industry-profitability/) IATA, 2026
3. [Fact sheet: Fuel](https://www.iata.org/en/iata-repository/pressroom/fact-sheets/fact-sheet-fuel) IATA, 2026

## Other sections

- [Summary](https://www.materialinsights.org/energy/e_aviation/index.md)
- [Overview](https://www.materialinsights.org/energy/e_aviation/overview/index.md)
- [Correlation](https://www.materialinsights.org/energy/e_aviation/correlation/index.md)
- [Science and limits](https://www.materialinsights.org/energy/e_aviation/science/index.md)
- [Value chain](https://www.materialinsights.org/energy/e_aviation/valuechain/index.md)
- [Engineering methods](https://www.materialinsights.org/energy/e_aviation/methods/index.md)
- [Equipment and suppliers](https://www.materialinsights.org/energy/e_aviation/equipment/index.md)
- [Relationships](https://www.materialinsights.org/energy/e_aviation/links/index.md)