Industry Fuel Costs and Net Profits

The global airline industry’s fuel bill grew by US$21 billion to US$111 billion in 2006 (accounting for 26% of operating expenses at US$65/barrel Brent of oil).
This is an increase of more than 250% on 2003’s fuel bill of US$44 billion (that accounted for 14% of operating expenses at US$28/barrel Brent).
In spite of this large increase, higher revenues and efficiency improvements helped the industry to reduce its net losses from US$4.1 billion in 2005 to US$0.5 billion in 2006.
In 2007 the fuel bill is forecast to grow to US$119 billion (accounting for 26% of operating expenses at US$63 per barrel Brent) due to:
Traffic growth
The renewal of fuel hedging contracts at higher prices
A further increase in refinery margins to $15.4 billion (compared to $7 billion in 2004)
Offset, in part, by further efficiency gains in fuel use made by airlines