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Wall Street is finding an unexpected beneficiary of America’s weight loss boom: airlines.
With the first GLP-1 weight loss drug now available in pill form, analysts at Jefferies say broad adoption across society could quietly lower fuel bills — airlines’ single largest cost — and lift earnings for the carriers.
“A slimmer society = lower fuel consumption. Airlines have a history of being vigilant around aircraft weight savings, from olives (pitless, of course) to paper stock,” the Wall Street firm said in a note to clients.
Jefferies contended that a 10% reduction in average passenger weight could translate into roughly 2% total aircraft weight savings, up to 1.5% lower fuel costs and as much as a 4% boost to earnings per share.
Patients are already getting their hands on the first GLP-1 pill for obesity from Novo Nordisk, and a similar product from Eli Lilly isn’t far behind, with U.S. approval expected within months. By eliminating the need for self-injection, pills are widely expected to attract first-time patients to obesity treatments.
Earnings Gains
Jefferies estimates the implications could be material for the largest U.S. carriers, led by American Airlines, Delta Air Lines, United Airlines and Southwest Airlines.
Collectively, the four carriers are expected to burn about 16 billion gallons of fuel in 2026 at an average fuel price of $2.41 a gallon, according to Jefferies. That puts their combined fuel bill at nearly $39 billion, accounting for nearly 19% of total operating expenses.
Assuming a 1% reduction in aircraft weight improves fuel efficiency by 0.75%, the investment bank estimates a 2% decline in average passenger weight could translate into roughly 4% upside to earnings per share across the group. That equals potential EPS gains of about 2.8% for Delta, 3.5% for United, 4.2% for Southwest and as much as 11.7% for American, which has more operating leverage to fuel costs.
Weight is one of the most important drivers of fuel efficiency, a point aircraft manufacturers including Boeing routinely emphasize. When Boeing delivers an aircraft, there is a fixed “operating empty weight,” with the remaining allowance up to the maximum takeoff weight split among fuel, passengers, baggage and cargo, Jefferies noted.
Jefferies used a 737 Max 8 as an example. The aircraft has an operating empty weight of about 99,000 pounds, with capacity for roughly 46,000 pounds of fuel and 36,000 pounds of payload. Assuming a two-class configuration with 178 passengers at an average weight of 180 pounds, passengers account for around 32,000 pounds.
If average passenger weight declined by 10%, total passenger weight would fall by about 3,200 pounds or roughly 2% of maximum takeoff weight, delivering meaningful fuel savings over thousands of flights per year, Jefferies said.
The industry’s fixation on weight is well documented. In 2018, United Airlines switched its Hemisphere magazine to lighter paper, trimming about an ounce per copy, a move expected to save 170,000 gallons of fuel annually, worth roughly $290,000 at the time, Jefferies noted.
— CNBC’s Michael Bloom contributed reporting.