Airlines ramp up efforts to trim fuel costs amid price volatility
Dhaka: Airlines worldwide are intensifying efforts to manage fuel spending as volatility tied to the U.S.-Iran war has pushed more carriers to reassess how they buy and use fuel, industry consultants say.
Chris Russo, Associate Director of North American Energy and Commodities at Boston-based Publicis Sapient, said interest in fuel-efficiency consulting had long gone unanswered until recent price swings changed airline attitudes.
The International Air Transport Association (IATA) projected in June that global airlines would spend USD 350 billion on fuel this year, up from USD 252 billion in 2025. Fuel costs are expected to account for 31.4% of operating expenses this year, compared with 25.4% in 2025.
Helene Manzoni, IATA's Senior Manager of Fuel Efficiency, said even large carriers have been asking the association to help assess and improve their fuel performance.
Airlines are looking to cut costs through more efficient ground and flight operations, along with sourcing cheaper fuel where possible, industry observers said. Some carriers also use fuel hedging, locking in prices in advance to guard against spikes, though the practice carries risk if prices later fall.
Southwest Airlines took an unusual step in May, shipping 12.6 million barrels of lower-cost Gulf Coast fuel by tanker through the Panama Canal to Los Angeles amid concerns over high prices and potential shortages from Asian suppliers.
The airline said its per-gallon fuel spending in the second quarter came in below competitors' reported averages, crediting ongoing efforts to manage costs opportunistically.
Southwest's Q2 fuel cost averaged USD 3.92 per gallon, versus USD 3.93 for Delta, USD 4.05 for American, and USD 4.19 for United, according to figures cited in industry reports.
JetBlue Chief Financial Officer (CFO) Ursula Hurley highlighted the carrier's fuel-management strategy during its second-quarter earnings call, pointing to more efficient routing, pilot-specific operational data, and predictive planning tools.
Koen Karsbergen, Co-Founder of Mexico-based Air52 Aviation Consultants, said airlines are working more closely with pilots to reduce fuel burn, including sticking to optimal flight plans and flying slower when a flight is ahead of schedule.
Carriers are also scrutinizing fuel-load decisions more closely, Karsbergen said. While a minimum fuel level is mandated for each route, pilots retain final discretion to add extra fuel as a safety margin.
Excess fuel, however, adds weight and reduces overall efficiency, prompting more airlines to ask pilots to justify carrying additional loads, according to Karsbergen.
Manzoni said IATA has identified a dozen procedures pilots can use to cut fuel consumption, such as single-engine taxiing and reduced reverse thrust during landing.
Despite JetBlue's emphasis on predictive planning, Russo said most airlines still lag in applying data-driven approaches, with the bulk of fuel decisions made manually rather than through automated systems.
He noted that energy firms such as Phillips 66 and Chevron, both Publicis Sapient clients, take a considerably more advanced approach to fuel management than most airlines, leaving room for carriers to improve how and when they purchase fuel.
Daniel Chereau, IATA's Head of Fuel, said larger airlines have generally invested the most in efficiency measures.
He pointed to Lufthansa's use of Aeroshark, an adhesive film applied to aircraft exteriors that mimics shark skin to reduce aerodynamic drag, as one example of innovation in the sector.
Chereau said airlines have shown notable creativity in pursuing fuel savings as cost pressures mount across the industry.
