After multi-year lows, the cost and consumption of airline fuel is rising again. Since the year 2000, major United States carriers, those that make more than 20 million dollars in revenue per year, consumed an average 1,434 million gallons of fuel and spent an average 2,695 million dollars on it on each year. Within that impressive figure, however, is a great deal of seasonal and yearly variation. As the economy changes at the national and international levels, airline carriers are impacted by a host of factors including the price of oil, the number of passengers traveling by air, and the airlines’ ticket pricing strategy.
Taking that variation into account, the recent turnaround towards an increasing trend in both costs and consumption is still impressive. Between December 2015 and the most recent data for December 2017, the total quantity spent on airline fuel by U.S. carriers (measured in millions of dollars) rose 33 % total. This increase comes after years of U.S. carriers spending less as airline fuel kept getting cheaper. Most of the U.S. carriers’ consumption of airline fuel takes place domestically in the United States, and recent years reflect that. Of the over 2,785 million dollars spent in December 2017 on fuel, 1,862 million, or approximately two thirds, of that was spent on domestic consumption.
Airline fuel consumption, measured in millions of gallons, follows a yearly cyclical pattern, with lows usually in February and highs in August. The graph above visualizes this pattern within each year, while also demonstrating the growing levels of fuel consumption, via the red lines representing each year’s average. After a drop in 2008, the yearly average is growing closer to surpassing the 17 year average, represented by the gold line. The cost per gallon of fuel has also turned from a decreasing trend to an increasing trend around March 2016 and has been continuing to grow up to the present.
The last big drop in fuel cost per gallon coincided with the recession of 2008. After 2000, the price of one gallon of fuel rose steadily for 8 years until the cost dropped almost two dollars from August 2008 to the start of 2009. The recent drop in the cost per gallon was slower, decreasing $1.78 over the course of two years from 2014 to 2016. By February 2016, the cost had reached a 12 year low at $1.21 per gallon, the lowest cost for a gallon of airline fuel since 2004. After March 2016, the trend in cost per gallon of fuel reversed and started increasing, and in January 2017 one gallon cost 29% more than it did in January of 2016. The most recent data recorded puts the cost per gallon of airline fuel at a two year high at the turn of the year, with a value of $1.91.
Although the impacts of rising airline fuel cost are difficult to predict, they may influence the price of air travel tickets for consumers traveling within the United States and internationally. Until then, whether costs and consumption will continue to grow in 2018 is still up in the air.