Economics & Energy

energy/fuel

The price paid for jet fuel is a function of long-term contracts, spot market prices and point of sale, among other factors. Fluctuations in the market price of jet fuel are highly correlated with movements in the price of home heating oil.

Our online calculator shows that, annually, every dollar increase per barrel drives an additional $465M in fuel expenses for U.S. passenger and cargo airlines. Every penny increase per gallon drives $195M in fuel expenses.

Dollars
per
Barrel

A B A + B
Crude
Oil
Jet Fuel
Crack Spread**
Jet Fuel
Spot Price
WTI NYH USG L.A. NYH USG L.A.
CY 2007 72.34 18.59 17.15 20.01 90.93 89.49 92.35
YTD 2008* 103.69 27.51 23.10 24.43 131.21 126.80 128.12
Last 5 Days* 124.62 33.08 30.35 34.25 157.70 154.97 158.88

Source: Energy Information Administration and ATA slide presentation

NYH=New York Harbor; USG=U.S. Gulf Coast; L.A.=Los Angeles, WTI=West Texas Intermediate (using cash/spot market)

*Through May 13, 2008; updated by Thursday afternoon of each week; prices do not include costs of delivery and storage (e.g., pipeline tariffs, tank fees) or state/federal taxes, all of which can add add 10-20 cents per gallon.
**The simultaneous sale of crude oil against the sale of refined petroleum products. These spread differentials, which represent refining margins, are normally quoted in dollars per barrel by converting the product prices into dollars per barrel and subtracting the crude oil price.

ATA Fuel Presentation

Historically, fuel expenses have ranged from 10 percent to 15 percent of U.S. passenger airline operating costs, but are currently running between 30 percent and 50 percent. At approximately 19.5 billion gallons per year, every penny paid for a gallon of jet fuel costs the U.S. passenger and cargo airline industry $195 million annually. (Note: One barrel contains 42 gallons.) Over the last several years,the price of jet fuel has significantly outpaced the price to fly a mile domestically, as illustrated in the table below and in our online slide presentation. From 2000 to the first half of 2007, the price of jet fuel more than doubled and the U.S. Consumer Price Index--the price of a representative basket of U.S. goods and services--rose 19.5 percent, whereas the price to fly a mile fell 10.2 percent.

YEAR Domestic Air Travel
(¢ per mile)*
U.S. Jet Fuel
(¢ per gallon)
U.S. CPI
(1982-84=100)
2000 15.27 90.1 172.2
2001 14.10 74.7 177.1
2002 13.09 70.9 179.9
2003 13.20 85.7 184.0
2004 12.79 120.8 188.9
2005 13.13 172.7 195.3
2006 14.47 197.0 201.6
2007 14.55 216.5 207.3
1Q08 15.20 285.3 212.1
Change vs. 2000 (0.5%) + 216.6% + 23.2%

*Excludes government-imposed taxes and fees

inside this section

Energy Slides and Q&A

Perspective on energy markets and implications for industry performance

Fuel 101: From Well to Wing

The journey of jet fuel and its important role in the airline industry

Weekly Jet Fuel Prices

Regional data on jet fuel prices from OPIS

Monthly Jet Fuel Cost and Consumption Report

Market and paid prices for U.S. passenger and cargo airlines since Jan-86

Annual Crude Oil and Jet Fuel Prices

Market and paid prices from 1977 to present

Fuel Efficiency: U.S. Airlines

Continuing the industry's track record will require reforming ATC systems

Alternative Fuels Q&A

ATA answers questions about alternative fuels use in commercial aviation

More About Energy and Fuel

Additional ATA materials, as well as link to government, assocation and council Web sites

ATA Letter to DOE Secretary Bodman on Home Heating Oil Reserve

ATA Letter to Department of Energy Secretary Samuel W. Bodman asking for the release of Northeast Home Heating Oil Reserve. (3/19/2008)

ATA Testimony - Commercial Carriers Climate Change Commitment

ATA President and CEO Jim May testifies before the House Select Committee on Energy Independence and Global Warming, regarding the industry’s strong environmental performance and plans for further enhancing airline efforts to protect the environment. (04/02/2008)