By Stuart Fox, IATA Director Flight and Operations 

The cheapest gallon of jet fuel is the one an airline never burns.

Fuel has always been one of the airline industry’s largest costs. However, with war in the Middle East raising both prices and volatility in energy markets, buying the fuel to keep planes flying now consumes almost a third of operating costs. That will amount to a walloping $350 billion spent by airlines in 2026, according to IATA’s latest global financial outlook for airlines.

While airlines in the aggregate are expected to remain profitable in 2026, the pressure on margins is clear. They were a paltry 4.2% in 2025. With the rise in fuel prices, they will shrink to 2.0%.

In these circumstances, airlines have no choice but to try to pass higher fuel costs on to their customers. But that is never a permanent remedy. While demand remains solid, tolerance for higher travel costs is also likely to have its limits.

Therefore, it should come as no surprise that an IATA survey conducted in March revealed that for 90% of airline respondents, improving fuel efficiency was at the top of their list of priorities. And for those with responsibility for financial and procurement teams, it was a priority for 96%.

The Pressure is on

A longstanding challenge has become an urgent problem.

So, where will the next gains come from?

With opportunities for further efficiency gains through fleet renewal or network changes already widely explored, the next gallon saved will increasingly come from better operational decisions supported by data. Finding additional savings requires deeper operational insight, better benchmarking, and an understanding of how performance compares with peers.

The Power of Data

IATA has real-time operational information from more than 240 airlines around the world that can generate insights. The value of our association is that airlines can learn from each other by sharing data, while introducing initiatives that work best for their own operations.

Our FEGA (Fuel Efficiency Gap Analysis) advisory service and FuelIS analytical platform are the core of our offering. These tools enable airlines to identify specific fuel-saving opportunities by fleet type, route profile, flight phase, and geographic region in real-time.

We can see, for example, if an airline consistently lands with higher fuel reserves than operators flying similar aircraft on comparable routes. Bringing this to light through benchmarking identifies opportunities to improve fuel efficiency without compromising safety. And these savings can be realized through guidelines and training so that the knowledge is spread to those who directly manage fuel use.

Industry Collaboration

While data helps airlines reduce the fuel burn within their control, industry collaboration is needed to address those factors beyond their control. Many inefficiencies originate elsewhere in the aviation value chain, particularly in the air traffic management system.

Airlines rely on Air Navigation Service Providers to enable more efficient flight trajectories throughout all phases of flight. One example is the use of more direct routings during arrivals, which can save significant fuel. We strongly advocate for operational improvements through ATM modernization that help airlines realize these efficiencies.

In today’s environment, every drop of fuel counts. Airlines can use data and benchmarking to identify savings within their own operations. But maximizing fuel efficiency will also require action across the wider aviation ecosystem.