Rising fuel costs hit Aerolíneas Argentinas' finances

Aerolíneas Argentinas' financial performance in the first quarter of 2026 reveals a significant increase in expenses that is outpacing revenue growth, mirroring global aviation industry trends. While the state-owned airline's current income rose by 20% compared to the same period last year, its current expenditures surged by a substantial 43.5%, more than double the income increase.

According to the Budget Execution Report on Public Companies, prepared by the National Budget Office of the Secretariat of Finance, the company's operating activity generated 95.4% of its revenue. On the expenditure side, costs for goods and services are highlighted, with fuel purchases being a major component. This rise in fuel costs is directly linked to the escalating conflict in the Middle East.

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the average price of aviation fuel will increase by 70% year-on-year, which will raise the total fuel bill that the industry will face this year by around US$100 billion.

To mitigate the impact of higher fuel prices, Aerolíneas Argentinas began applying a surcharge to its fares in early March. This strategy is also being adopted by other airlines worldwide. The International Air Transport Association (IATA) projects that the average price of aviation fuel will increase by 70% year-over-year, adding approximately $100 billion to the industry's total fuel bill for the year.

Consequently, IATA forecasts a significant drop in global net profits, from $45 billion to $23 billion in 2026, with net profit margins shrinking from 4.2% to 2%. Despite these challenges, Aerolíneas Argentinas reported a positive economic result of $46.166 million in the first quarter. However, its primary result was negative at $131.442 million, and its financial result showed a deficit of $135.735 million. Company sources indicated that the analyzed period covers the peak summer season and that the full impact of rising fuel costs became more pronounced towards the end of the quarter. They also noted that the operational result remained positive, meaning the core business generated more revenue than expenses.

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the financial result was negative because during the first quarter of this year Aerolíneas Argentinas continued with its policy of canceling debts related to financing for the acquisition of aircraft.