Jet fuel prices have doubled since Operation Epic Fury began on February 28, 2026, creating sharp divides among airlines based on their hedging strategies. Spot prices jumped from $96 per barrel to $197, with northwest European jet fuel reaching a record $1,840 per metric ton on April 3, due to the Strait of Hormuz closure and Persian Gulf refinery losses.
Fuel represents 20% to 35% of operating costs, turning many pre-conflict flights unprofitable. Hedging against crude oil offers incomplete protection, as jet fuel prices have risen over twice as much as crude amid widened refining margins, from $21 to peaks of $144 per barrel in Asia.
European airlines hold the most coverage, averaging 80% for 2026, though it declines later in the year. Ryanair secured 84% of this quarter at $77 per barrel and 80% for next year at $67, despite supply risks through June. Lufthansa covered 82% for the current quarter and 77% for the year, pausing new hedges. IAG hedged 60% to 70%, easyJet 84% for the first half at $715 per ton dropping to 62%, and Wizz Air 83% for its fiscal year at $681 to $749 per ton. Finnair targets 70% to 95% short-term, while Norwegian Air Shuttle has 45% for 2026. SAS entered unhedged, canceling nearly 1,000 April flights, and AirBaltic with just 6% coverage received a €30 million emergency loan amid bond drops and a halted IPO.
US carriers like Delta, American, United, and former hedger Southwest abandoned programs years ago and now face full exposure, with shares down 4.6% to 6.6% on April 2. Delta relies partly on its Trainer refinery. United cut 5% of flights.
In Asia-Pacific, supply shortages compound price hikes. Qantas hedged 81% for late 2026, Singapore Airlines 49% short-term declining further, Cathay Pacific 30% through mid-2026 with suspended Middle East flights, and China Eastern unhedged. Vietnam Airlines axed 23 weekly domestic flights.
Many carriers, including Ryanair and Lufthansa, delay new hedges hoping for de-escalation, as upcoming earnings will reveal Q2 and Q3 coverage amid potential shortages at European hubs.