Airlines Hedge Against Fuel Price Increases Amid Global Tensions
Airlines worldwide are taking measures to hedge against potential fuel price increases due to rising global tensions.
The current conflict in Iran has led to a surge in Brent crude oil prices, reaching above $80 per barrel on Tuesday. This increase is expected to impact airlines' costs significantly, as jet fuel accounts for a substantial portion of their expenses.
Several major carriers have announced their hedging strategies to mitigate the risks associated with rising fuel prices. For instance, Air France-KLM has increased its total exposure to 87% from 68%, while Air New Zealand is hedging 83% of its fuel for the second half of its financial year.
Cathay Pacific and China Eastern Airlines have also revealed their hedging policies, with Cathay covering around 30% of costs until the second quarter of 2026. EasyJet has hedged 84% of its fuel needs for the first half of 2026 at an average cost of $715 per metric ton.