Weight-Loss Drugs May Reduce US Airlines' Fuel Costs

A Jefferies analysis says wider use of weight-loss drugs could cut as much as $580 million in fuel costs for the largest US airlines this year, based on estimated declines in passenger weight.

Jefferies analysts say wider use of weight-loss drugs could lower fuel costs for major US airlines this year. The analysts link this to lighter passenger loads as more people lose weight. Airlines use average standard weight figures from global aviation authorities to calculate fuel needs. The discussion reflects rising use of drugs such as Ozempic and Wegovy and a reported recent decline in adult obesity rates. Reported details: - Jefferies estimated that slimmer passengers could save the top four US carriers as much as $580 million in jet fuel costs this year. - The article mentions the top four US carriers, including United Airlines Holdings Inc. and Delta Air Lines Inc., are expected to spend $38.6 billion combined on jet fuel this year. - A 10% weight loss by passengers was estimated to save about 1.5% in fuel use and to potentially boost earnings per share by 4%, according to a Jan. 12 Jefferies note. - Analysts pointed to a three-year decline in the US adult obesity rate and a doubling in the number of adults reported to be taking weight-loss drugs. - The analysts said their savings estimate does not include any potential effects on snack sales. Summary: If passenger weights fall as the analysis suggests, fuel expenses for major carriers could be modestly lower this year. The note also framed possible effects on earnings per share, but broader industry impacts and secondary effects were not quantified. Undetermined at this time.