The Price Of Oil And Fuelling An Aircraft
A look at the cost of aviation fuel for commercial aircraft
The price of jet fuel (known as Jet A1) is closely aligned the price of oil which varies on a daily basis. In January 2015, the price of Jet A1 was down 42.8% compared to the previous 12 months.
The price of jet fuel as of January 2015 is as follows:
- 170.8 Cents (US dollars) per Gallon
- 1 litre = 0.3125 pence (pound sterling)
- 1 litre = 0.40 Euros
This does not include delivery of the fuel. At present there is no tax on aviation fuel in Europe.
A jumbo jet (Boeing 747-400) flying from London to New York burns approximately 70,000 kilograms of fuel. Jet fuel has an approximate specific gravity of 0.85 (the measure of its density), which equates to 82,300 litres.
Therefore the cost of the fuel required to fly from London to New York is approximately £25,500 (€32,500). A jumbo jet carrying 450 passengers, would work out at £57 (€73) per person.
The prices airlines actually pay for their fuel varies substantially depending on what they’ve “hedged” it at. Hedging is where you agree a constant price for fuel for a set period of time. This helps to reduce risk and fixed costs. For example, fuel might be hedged at 200 cents per gallon for 2 years. Whilst it can be advantageous, airlines can loose out if there is a drop in price.