The unexpected windfall for airlines: Could it be Ozempic?
In a surprising twist, the popularity of weight loss drugs like Wegovy and Mounjaro might just be a boon for airlines, potentially reducing their fuel costs and boosting profits. But here's where it gets controversial...
According to analysts at Jefferies, a Wall Street investment bank, a 10% slimmer society could lead to a 4% increase in earnings per share for major US airlines. Imagine a world where a healthier population translates to lower fuel consumption and, consequently, more profits for airlines!
Sheila Kahyaoglu, an equities analyst, puts it simply: "A slimmer society equals lower fuel consumption." Fuel costs make up a significant chunk (20-30%) of an airline's expenses, which directly impacts ticket prices.
Since 2022, the US adult obesity rate has dropped from around 40% to 37%, thanks to the introduction of GLP-1 drugs that regulate appetite and blood sugar. These drugs, now available in pill form, have the potential to further impact waistlines and, by extension, airline fuel costs.
Looking specifically at American, Delta, United, and Southwest airlines, Kahyaoglu's team predicts that a 10% slimmer US society would result in a 2% weight savings, trimming fuel expenses by up to 1.5%. This translates to an average 3.9% increase in earnings per share across these four airlines.
Honeywell, an aviation company, estimates that every 450 grams of a plane's weight, including crew, passengers, baggage, and the aircraft itself, adds up to approximately $10,000 in annual fuel costs on commercial aircraft. So, every little bit of weight reduction counts!
Peter Harbison, Chairman of GreenerAirlines.com based in Sydney, believes that the impact of GLP-1 drugs on airline weights might be marginal in the short term due to various other variables. However, he acknowledges that even a 1% reduction in flight costs can make a difference.
In Australia, the obesity rate stands at around 32% of the population, according to the ABS. The reported use of Ozempic and similar GLP1 drugs is higher in the US, with a rise from 5.8% of US adults in early 2024 to 12.4% today.
As of 2025, only about 2% of Australians take Ozempic, with nearly half of the doses purchased privately. Salim Hijazeen, from the Swinburne University School of Engineering's Department of Aviation, cautions that GLP1s might only make a small difference. He suggests that airlines generally focus more on fuel optimization rather than planning around potential health trends.
Kahyaoglu calculated her forecast by considering the weight of 178 passengers aboard a Boeing 737 Max 8, with an average pre-Ozempic weight of 180 pounds. Factoring in the impact of Ozempic, the same passengers' weight was estimated at 178 pounds. This resulted in a difference of 3204 pounds in maximum takeoff weight.
Applying a rule of thumb, a 1% weight savings equates to a 0.75% increase in fuel efficiency. Thus, a 2% improvement in aircraft weight could lead to a 4% increase in earnings per share.
Harbison notes that the introduction of Ozempic sparked speculation about newly slimmer people traveling more frequently. However, he points out that even with weight loss, these individuals might still be above average, potentially pushing up the average weight on planes.
Qantas declined to comment, while Jetstar and Virgin were contacted for further insights.
The potential impact of weight loss drugs on airline profits is a fascinating topic. What do you think? Could this be a game-changer for the aviation industry, or is it a marginal effect that's easily overshadowed by other variables? We'd love to hear your thoughts in the comments!
