An airline’s cost breakdown depends on the year, region, carrier and accounting denominator. Fuel is often the largest individual expense, but its share can change sharply with fuel prices; labor, aircraft ownership, maintenance and airport or en-route charges also matter. Historical cost shares and industry forecasts should not be treated as one current, universal airline budget.
What the main airline cost categories are
IATA’s June 2024 explainer, based on 2022 World Air Transport Statistics (WATS), identified aircraft fuel and oil, depreciation and amortization, and flight crew salaries and expenses among the largest global cost categories. These are historical shares of total airline costs, not a current forecast or a breakdown for every carrier.
| Cost category | Share of total airline costs | Basis |
|---|---|---|
| Aircraft fuel and oil | 28.7% | IATA, 2022 data published in 2024 |
| Depreciation and amortization | 9.1% | IATA, 2022 data published in 2024 |
| Flight crew salaries and expenses | 8.6% | IATA, 2022 data published in 2024 |
The 8.6% figure covers flight crew salaries and expenses; it is not a measure of all airline labor. In later outlook materials, IATA describes labor as the largest non-fuel cost category and also highlights maintenance, aircraft ownership, and airport and en-route charges. Those broader labels are not directly interchangeable with the individual 2022 WATS categories.
Why fuel’s share varies
Fuel is exposed to market-price changes, so its portion of operating costs can shift even when the other categories have not changed by the same proportion. Geography can also matter. In IATA’s 2022 data, aircraft fuel and oil represented 36.3% of airline costs in Latin America and the Caribbean, compared with 25.5% in North America. These are examples from that year, not current regional estimates or a complete comparison of all regions.
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How IATA’s 2026 cost forecasts changed
IATA’s December 2025 outlook projected global airline industry costs of USD 981 billion in 2026, up 4.2% year over year. It forecast USD 252 billion in fuel spending, equal to 25.7% of operating expenses, and cited pressure from labor, maintenance, aircraft ownership, and airport and en-route charges. These were forecasts, not reported 2026 results.
In its June 2026 update, IATA projected total operating expenses of USD 1.117 trillion for 2026. It estimated fuel costs at USD 350 billion, or 31.4% of operating expenses, based on an expected average jet-fuel price of USD 152 per barrel. The update forecast non-fuel costs of USD 767 billion, including USD 271 billion for labor, and reported that lease rates had risen to record levels while older fleets required more maintenance. These, too, are June 2026 estimates and forecasts.
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The difference between the December and June projections illustrates why the forecast vintage matters: the later outlook reflected a major fuel-price shock. Do not use the December fuel share as if it were IATA’s latest 2026 estimate.
What broad expense labels can include
Expense categories in company filings may bundle several different activities. American Airlines’ 2024 Form 10-K attributed maintenance cost increases to engine overhauls, component-part repairs and airframe heavy checks, citing higher volume and material costs. It said increases in other operating expenses included flight operations, onboard food and catering, crew travel, ground and cargo handling, passenger accommodation and lounge operations. This is one company’s explanation of its reported expenses, not a universal allocation or a set of category shares for the industry.
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How to compare airline cost breakdowns
A comparison is useful only when the underlying measures are sufficiently alike. Before comparing percentages or drawing conclusions about which airline is more efficient, check:
- Year and publication vintage: distinguish a reported historical result from a forecast, and note when a forecast was issued or updated.
- Geography: a global figure, regional figure and single-airline filing do not describe the same population.
- Denominator: total costs, operating expenses, unit costs and per-flight or per-block-minute measures are different bases.
- Business model and accounting definitions: carriers may have different operations, and broad expense labels may group unlike costs.
IATA’s December 2024 announcement about its then-current 2025 outlook captured the pressure of managing costs alongside infrastructure performance. IATA Director General Willie Walsh said: “With margins that thin, airlines must continue to watch every cost and insist on similar efficiency across the supply chain—especially from our monopoly infrastructure suppliers who all too often let us down on performance and efficiency.” The statement reflects the context of that December 2024 outlook, not a universal measure of airline margins or costs.
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