How Much Of Your Airline Ticket Price Is Fuel Cost?
We have been writing, and talking, about these insane prices for travel this summer ad nauseam. It played a role in why I decided to mostly boycott summer travel. Well, that and the craziness that is happening out there right now. It is easy for people to chalk up the higher airfare costs to fuel costs but is that really playing a huge role here? How much of your airline ticket price is fuel cost? I decided to try to do a little sleuthing and find out.
How Much In Fuel Do You Cost An Airline For Your Flight?
While doing some research I noticed that the numbers quoted for airlines / planes vary a bit. That makes sense since not every plane is the same so these numbers have some wiggle room for sure.
How Many Miles Per Gallon Per Passenger?
Let’s take a look at the Boeing 747. This aircraft has to use an astonishing 5 gallons of jet fuel to go one mile. That sounds truly horrible until you realize that the plane can carry over 500 passengers. That makes it a bit better. How Stuff Works did some calculations based off of these numbers:
- Average of 500 passengers per flight on a Boeing 747
- If it takes 5 gallons to go 1 mile that is: 5 gallons / 500 passengers = 0.1 gallons per person, per mile
- That works out to 100 miles per gallon of jet fuel, per passenger
This is of course on a Boeing 747. If you are flying a smaller aircraft that could drop the rate down to around 60 miles per gallon per passenger.
How Much Does Jet Fuel Cost Per Gallon?
The most recent numbers I could track down while searching was for May on this cool chart that shows the cost for each month back to 2000. The US Department of Transportation’s report for March of 2022 also said the cost just hit an 8 year high. Whoa, that must mean they have skyrocketed right?
The cost of a gallon of fuel in 2019 (domestically) averaged $2.00 per gallon, which seems to be around the average over the last 10 years too. So how much did it cost in April of 2022? It jumped up to $3.58 per gallon. That is a significant increase, no doubt, a jump of 1.5 times compared to 2019’s average.
So it would make sense that airfare is 2X-3X more on many routes this year, right? Not so fast! Let’s take a look at some flights
Let’s assume the lower end of things and that the airline is getting 60 miles per gallon per person for flights. I’ll also add in the difference at the higher end with 100 miles per passenger per gallon. How much more does if cost them to fly you this year versus in 2019?
- A flight from NYC to LA is about 2,500 miles one way
- Fuel cost for you in 2019 – 2,500 / 60 X $2.00 = $83.34
- Fuel cost for you in 2022 – 2,500 / 60 X $3.58 = $149.17
- Difference in cost $65.83
- If averaging 100 miles per passenger the cost difference is $39.50
- A flight from Detroit to Orlando is about 1,000 miles
- Fuel cost for you in 2019 – 1,000 / 60 X $2.00 = $33.35
- Fuel cost for you in 2022 – 1,000 / 60 X $3.58 = $59.68
- Difference in cost $26.33
- If averaging 100 miles per passenger the cost difference is $15.80
When you multiply this out by total passengers the numbers are large no doubt. We are looking at an increase in the tens of thousands of dollars per flight. When broken down by passenger you get a better feel for what the cost for you is though. The difference is quite a bit less than the price hikes we have seen the last several months.
What Else Is Causing Airfare To Be So Expensive?
The above calculations are simplistic for sure. It doesn’t include the cost to taxi or positioning and aircraft etc. but it still leaves a large gap between the increase in fuel cost and the increase in airfare prices. So what else is playing a role here? Here are some other things driving up the airline’s costs:
- Passenger compensation for delays and cancellations. You can’t give out $80,000 a flight in compensation and have it not drive up costs. Think of how many cancellations there have been recently and how many people were given vouchers, miles or cash.
- Paying crew 2X – 3X pay to get them to show up to work.
- Inflation costs rising across the board
- Increased storage costs from planes etc. that don’t have enough staff to be used
Those are just a few that I came up with but add huge cost to the airlines.
The Sad Reality Is The Airlines Caused Most Of This
The really sad thing is the airlines are to blame for a lot of this. They cut too deeply with layoffs and early retirements at the beginning of the pandemic. That was all while they were getting government funds to pay employees etc.
That exacerbated the already growing shortage of pilots airlines were looking at over the next decade. They also created a shortage of flight attendants, support staff and airport workers.
This has led to massive cancellations, flight delays because of staffing issues and the current mess we see out there. Because of that they have fewer flights available but still need to offer large incentives to their overworked staff just to maintain this now lower level. So this “shortage” of availability, all while demand skyrockets, is mostly of their own doing. But they continue to charge a pretty penny because of it.
How Much Of Your Airline Ticket Price Is Fuel Cost: Final Thoughts
There is no doubt fuel costs are up, and it is hitting the airlines hard, but when you break it down per passenger there is still a lot of additional costs baked in to these insane airfare prices. A myriad of things have led to these price hikes outside of fuel costs, and most of them are the airline’s own fault. Even with that being the case they keep using the fuel cost mantra as a shield when discussing ballooning airfare prices to the general public.
Hopefully we start to see prices soften this fall and winter once the busy summer travel push is done.
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Always comes down to Greed.
This is a sterling illustration of marrying the worst aspects of Socialism and Capitalism together:
1) Taxpayers bail out desperate airlines, asking only that the airlines keep all people and have them trained and ready when recovery arrives.
2) Airlines cheerfully take the money but find ways to weasel out of their promise obligations.
3) The economy comes roaring back.
4) Taxpayers who paid gobs of money for the airlines to survive get a big middle finger from those airlines due to the airlines’ malfeasance by experiencing flights scheduled without actual crew, massive numbers of flight cancellations, and ongoing epic meltdowns. All due to 2).
I think the government should have given airlines 90 days to stop this nonsense at the beginning of 2022 or be forced to pay back all monies received by the end of the year, plus interest. We can’t unspill the milk but we can induce the airlines to run schedules they can truly manage with the people they still have while not gouging the taxpayers that enabled their survival. If the airlines have to pay more and eat that extra cost for a season or two while getting their act together, that’s only reasonable.
It is sad to see for sure. I think they should have passed clear delay and cancellation compensation laws as a precursor to handing out the money. Think of how differently these airlines would have acted knowing they need to pay everyone $600 they delay etc.
Not to mention. A lot of airlines hedge their fuel as to to reduce or eliminate their exposure to volatile and potentially rising fuel costs.
That is true too, great points Peter.
Hey Mark, you have a typo in the years listed in your chart. (No need to publish this comment.)
Updated – thanks Scott
I’ve been looking @ tickets for several trips I have scheduled in October & November (NOT Turkey Day, btw) & prices are insane, especially considering the planes are mostly empty at this point. Bottom line, airlines are charging what they are charging because people are paying-once people stop paying, then the prices will come down.
I am hopeful that will catch up soon. I think people had already booked their summer stuff and are sticking with it but inflation and gas prices are hitting their pocket book and they won’t be willing to pay it for future bookings. Just a guess on my part though.
HOW DARE YOU accuse large multi-national organizations of taking advantage of joe & jane.