Airlines around the world are facing sharply uneven operating pressures as volatile jet fuel prices collide with weakening local currencies, according to fresh analysis from the International Air Transport Association (IATA). What began as a decade-long pattern of currency-driven cost disparities has intensified in recent years, creating widening gaps in how carriers experience fuel-related expenses.

IATA recalled that its “first chart of the week” ten years ago highlighted how jet fuel price declines affected economies differently because of movements in exchange rates against the US dollar. Today, however, the dynamic has grown significantly more pronounced. Jet fuel prices, measured in USD, have whipsawed since 2020—first collapsing amid pandemic lockdowns, then rebounding as air travel bounced back against the backdrop of supply chain shortages and growing geopolitical instability.

The analysis shows that airlines in countries with depreciating currencies are absorbing a disproportionate share of the burden. Russia and Brazil stand out as the most affected, with the ruble’s fall linked to the Ukraine conflict and extensive sanctions, while the Brazilian real has softened amid expectations of monetary policy easing, persistent fiscal concerns, and the impact of tariff policies on the nation’s external position.

Even in larger economies, the effect has been noticeable. The EU, China, and India have all experienced currency weakness relative to the dollar since mid-2022. But the picture is not entirely uniform: the report noted that the US dollar itself has shed around 10 per cent of its value against many currencies this year, allowing countries in that stronger-currency bracket to enjoy lower local-currency fuel bills.

Fuel’s central role in aviation economics remains undeniable. IATA emphasised that jet fuel accounts for nearly 26 per cent of airline operating costs, rivaling labour as the single largest expense. Complicating matters further, roughly 55–60 per cent of global airline costs are denominated in US dollars, compared with just 50–55 per cent of revenues—an imbalance that magnifies currency losses.

The financial implications are direct and measurable. According to the association’s assessment, a one per cent appreciation of the US dollar against global currencies can erode airline operating margins by around 0.1 percentage points. Conversely, a one per cent depreciation of the dollar tends to bolster margins by a similar degree.