IATA: Rate of change in fuel price more significant for airlines than price level

IATA Economics reported (13-Mar-2026) the rate of change in jet fuel prices tends to be more significant for airlines than the price level. IATA stated: "The most damaging episodes occur when fuel prices rise rapidly, and airlines do not have time to adapt their strategy". Details include:

• Jet fuel prices averaged approximately USD124 per barrel between 2011 and 2014, one of the highest price periods in aviation history. IATA noted the global airline industry achieved "reasonable performance" and generated operating margins of approximately 3% over the period. The association stated: "The industry adapted to high fuel prices through fare adjustments, efficiency gains, capacity optimisation, and procurement management, allowing profitability to remain positive despite high jet fuel costs";
• Jet fuel prices increased approximately 40% year-on-year to USD127 per barrel in 2008, and airline industry margins decreased from about 4% to zero. IATA stated: "Airlines were unable to pass through such a rapid cost increase quickly enough to protect margins".

IATA concluded: "airline profitability is highly sensitive to the speed of fuel price changes. When fuel prices remain elevated but stable, airlines can adjust pricing and operations gradually and continue to operate profitably, although typically with thinner margins. Fuel price shocks, however, push costs higher faster than revenues can adjust, and pose an elevated risk of eroding margins and industry profits". [more - original PR]