In aviation, where margins are razor-thin and competition fierce, the ability to optimise fuel costs isn’t just a necessity—it’s a game-changer. Yet many airlines are still relying on outdated spreadsheet models for one of their most critical expenses. It’s time to upgrade to a smarter solution.
Fuel is the single largest operating cost for most airlines, often accounting for 20–30% of total expenses. Managing this cost effectively is critical for profitability, especially in an industry defined by narrow margins and intense competition. Fuel modelling, therefore, plays a pivotal role in forecasting, budgeting, and optimising airline operations.
Traditionally, many airlines have relied on spreadsheets for fuel modelling. While spreadsheets offer familiarity and flexibility, they fall short in handling the complexity, data volume, and rapid scenario planning required in today's volatile environment. Modern planning platforms provide a robust alternative, offering capabilities that far outpace those of spreadsheet-based models.
Fuel modelling involves forecasting fuel consumption, predicting costs, and optimising usage across an airline's network. Key considerations include:
Jet fuel prices are influenced by global geopolitical factors, supply chain dynamics, and economic conditions, making accurate predictions challenging.
Fuel consumption varies by aircraft type, route length, weather conditions, and payload.
Airlines often employ hedging to mitigate price risks, requiring models that account for financial derivatives and their impact on costs.
Accurate fuel modelling enables airlines to control costs, improve profitability, and make data-driven decisions about fleet utilisation, route planning, and pricing strategies.
While spreadsheets have been a mainstay in fuel modelling, they have significant limitations:
By leveraging integrated data and automation, airlines can achieve more accurate forecasts, reducing the risk of overestimating or underestimating fuel costs.
Dynamic scenario modelling allows airlines to respond swiftly to market changes, such as fuel price spikes or regulatory shifts, ensuring they stay competitive.
Advanced analytics identify inefficiencies in fuel usage, enabling targeted strategies to reduce consumption and maximise profitability.
With integrated tools for tracking and modelling sustainable aviation fuel usage and emissions, airlines can align their operations with regulatory and consumer expectations for sustainability.
Fuel modelling is a critical function for any airline, influencing both short-term profitability and long-term sustainability. While spreadsheets have served the industry for decades, their limitations are increasingly apparent in today’s complex and volatile environment.
Modern planning platforms, such as Anaplan, offer a transformative solution. By providing real-time integration, enhanced accuracy, scalability, and collaboration, these tools empower airlines to navigate uncertainty with confidence. Transitioning from spreadsheets to a robust planning platform is not just an upgrade—it’s a necessity for staying competitive in the ever-evolving airline industry.
If your airline is ready to optimise fuel modelling and elevate financial planning, let us show you how a modern planning platform can transform your operations. Get in touch with us today!
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