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How airlines have reacted to fuel price increases

The Iran war has led to higher oil prices, and this is affecting jet fuel prices. This accounts for a large portion of airline costs.

Brent crude oil rose to a high of $80 per barrel Tuesday amid concerns about disruptions in supply.

On Tuesday, the spot Northwest European jet fuel price was $1,133 per ton, their highest level since late 2022.

Futures and options are used by some airlines to protect themselves against rising prices. Some airlines also hedge against changes in the value of the U.S. Dollar, which is used to price jet fuel.

Here is a summary on how some of the largest airlines in the world hedge their risks:

AIR FRANCE-KLM:

In 'February,' the Franco-Dutch Group said it had increased its total exposure to fuel consumption over a year to 87%. The group said that it had increased its hedging percentages and extended the horizon of its hedging to eight quarters, up from six.

AIR NEW ZEALAND

New Zealand's national carrier announced in February that it would hedge 83% of fuel costs for the second half year of its financial period and 46% of fuel costs for the first six months of the year up to 2027.

The majority of the hedges are in Brent Crude with some opportunistic Singapore Jet Swaps expected in second half of the year.

CATHAY:

Hong Kong's flagship airline said last year that it would hedge fuel costs into the second quarter 2027. This will cover around 30% of the cost until the?second quarterly of 2026.

CHINA EASTERN:

State-owned airline, Air China, said that it had made careful assessments on the basis of the derivatives markets conditions and didn't carry out any transactions to hedge jet fuel in the first half 2025. It had no jet fuel hedging contract outstanding as of 30 June 2025.

EASYJET:

British budget airline, in January, said it had hedged 84 percent of its fuel requirements for the first six months of 2026. It also hedged 62% of its fuel for the second half and 43 percent for the first six months of 2027 at an average cost of $715 per metric tonne, $688 for the second half and $671 for the first.

The company has purchased 80% of its dollars for the first six months of the year at $1.30 a pound. It also bought 62% of the dollar for the second half, at $1.24 a pound, and 40% of the dollar for the first six months of 2027, at $1.32 pound.

FINNAIR:

The Finnish carrier has updated its risk management policies in December to extend the hedging period to 24 months, from 18 months.

The company has purchased 219 tons at an average cost of $718 per ton for the first quarter and 834 tons at an average cost of $697 per tonne through the second quarter of 2027.

The hedging rate is set at 70%-95% in the first three-month period of the hedging and then lower limits are set for each subsequent quarter.

British Airways and Iberia's owner said that in February, fuel and currency hedges were down 9% by 2025 as compared to the year before.

It stated that its policy included hedging up to 75% near-term expectations near-term and up to 80% in the case of low-cost carriers.

ICELANDAIR:

Icelandic airline said it would hedge fuel consumption between 20% and 50 percent six months in advance, 0% to 40 percent seven to twelve months ahead and 0-20% for 13-18 months.

The company said that a 10% rise in fuel prices would have a $11.6 million impact on its equity.

LUFTHANSA:

Last year, the German carrier stated that its fuel hedging horizon is up to 24 month. The German carrier said that its fuel hedging ended 2024 covered approximately 76% of the forecasted 2025 fuel requirements and approximately 28% of the forecasted 2026 fuel requirements.

NORWEGIAN AIR

In February, the Norwegian airline said it had hedged approximately 45% of estimated jet fuel consumption in 2026. And about 25% in 2027.

QANTAS:

In February, the Australian airline reported that 81% of fuel for its second half financial year ending June 30 2026 was hedged.

RYANAIR:

Michael O'Leary, the Irish carrier's CEO, said that the company had hedged 84% of its jet fuel needs at $77 a barrel in the current quarter. He also stated that 80% of the company's jet fuel requirements were hedged at around $67 a barrel.

Last year, the largest Scandinavian airline announced that it temporarily changed its fuel hedging policies due to uncertain market conditions. It also stated that it had no fuel consumption hedged in the next 12 months.

Hedging is allowed up to 50 percent for the next six months. The company's policy targets between 40 and 80 percent of the anticipated volumes in the coming twelve months.

SINGAPORE:

The company announced in November that it would hedge fuel for a period of up to five years. Fuel was covered to the tune of 49% in the third quarter of December, 47% during the fourth quarter of March, and 24% by the second half of 2027.

It stated that it paid between $66-$69 per barrel for Brent hedged and between $79-$87?per barrel for MOPS.

VIRGIN AUSTRALIAN:

In February, the Australian airline announced that it would hedge 85% of fuel costs and 94% for foreign exchange in its second half-year financial year.

WIZZ Air:

Hungarian budget airline said in January that it would hedge 83% of its jet fuel needs for the period up to March 2026, at a cost between $681 and $749 per metric tonne.

It stated that it would cover 55% of the total year up to 2027, and 7% of the total year up to 2028 at a cost of $650 to $716 per metric tonne and $628 to $694 per metric tonne, respectively.

(source: Reuters)