September 13, 2019
When most people think of gas prices, they understandably focus on the price they pay for gas at the pump. Yet the price that airlines pay for fuel also impacts millions of Americans.
Whether a professional travelling for business, or a family visiting relatives for the holidays, the cost of jet fuel matters because it’s a major expense for airlines and thereby directly impacts the price of an airline ticket.
Airlines are transporting record numbers of passengers—78 million in July 2019 alone—according to the Estimated U.S. Airline Traffic Data from the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS). Airlines also have been transporting more freight since 2015, according to the Air Cargo Summary Data through May 2019 from BTS.
But despite moving more people and cargo, airline fuel consumption has been remarkably stable, which is a good thing.
Jet fuel consumption in July increased by just 1 percent from June and 2 percent from last July. The chart below shows that these changes are within the range of volume changes over the last six years (Figure 1).
Fuel costs are one of the largest, most variable airline expenses, representing between 15 and 20 percent of total expenses, according to Airline Financial Data from BTS. U.S. airlines spent $3 billion on fuel in July 2019, benefiting from a 4 percent decrease in the average price per gallon year-to-date relative to 2018. Spending on jet fuel was 9 percent lower than it was in July 2018, according to the Airline Fuel Cost and Consumption data from BTS.
The average price of an airline ticket declined by 8 percent from the first quarter of 2015 to the first quarter of 2019, according to BTS’s National-Level Domestic Average Fare Series. Lower fuel prices likely helped enable fare reductions, and that’s good news for U.S. consumers, for business travelers, and for families looking to travel.
Remember, the next time you book a flight, that lower jet fuel prices affect you too—and thanks to the strong economy, Americans are able to fly from accessible airports at affordable prices.
New data on airline fuel cost and consumption will be released on October 3, 2019.