Data-driven operations and greater industry cooperation are becoming increasingly important for airlines seeking to reduce fuel consumption as higher energy prices put mounting pressure on profitability, according to Stuart Fox, Director, Flight and Operations at the International Air Transport Association (IATA).
Fuel is expected to represent nearly one-third of global airline operating costs in 2026, with carriers projected to spend about $350 billion on jet fuel. IATA said higher and more volatile energy prices, partly linked to conflict in the Middle East, are expected to weigh heavily on airline profitability.
Global airline profit margins are forecast to decline from 4.2% in 2025 to 2.0% in 2026.
Although airlines could attempt to offset higher fuel expenses through increased fares, IATA said there is a limit to how much additional cost passengers are willing or able to absorb. As a result, improving fuel efficiency has become a key priority across the industry.
An IATA survey conducted in March found that 90% of airlines considered fuel efficiency a top priority. The figure rose to 96% among respondents working in finance and procurement.
With fleet modernisation and network adjustments already delivering many conventional efficiency improvements, IATA said airlines will increasingly need to rely on data-driven operational decisions to achieve additional savings.
Benchmarking can help carriers identify inefficient fuel use by comparing their performance with airlines operating similar aircraft on comparable routes. IATA currently has access to real-time operational data from more than 240 airlines.
The association’s Fuel Efficiency Gap Analysis (FEGA) advisory service and FuelIS analytical platform allow airlines to assess potential savings by aircraft type, route, flight phase and region.
For instance, benchmarking may show that an airline regularly lands with higher fuel reserves than comparable operators. Such findings can help identify opportunities to reduce fuel burn without compromising safety, supported by operational guidance and crew training.
IATA, however, said airlines cannot resolve every source of inefficiency independently. Greater cooperation across the aviation industry, particularly in air traffic management, is also needed.
More efficient flight paths and direct arrival procedures can help reduce unnecessary fuel consumption. IATA is therefore urging continued investment in modernising air traffic management systems and stronger cooperation among aviation stakeholders.
With fuel expenses continuing to weigh on airline finances, IATA said data analysis, performance benchmarking and coordinated operational improvements will play an increasingly important role in identifying further savings and improving efficiency across the industry.
Source: ZAWYA