Airlines Scramble to Shield Against Rising Fuel Costs as Oil Prices Climb

Major airlines worldwide are ramping up fuel hedging strategies as jet fuel prices surge due to rising oil costs from Middle East conflicts. Carriers are using financial instruments to lock in fuel prices months or years ahead, with some airlines protecting over 80% of their fuel needs.

Airlines across the globe are implementing aggressive strategies to protect themselves from skyrocketing fuel expenses as oil markets react to ongoing conflicts in the Middle East.

Brent crude oil climbed past $80 per barrel this Tuesday amid concerns about potential supply disruptions, directly impacting jet fuel costs that represent a major expense for airline operations.

To combat these price fluctuations, carriers employ financial contracts including futures and options to secure predetermined fuel costs. Many also protect against U.S. dollar fluctuations since jet fuel pricing is denominated in American currency.

Here’s how major international airlines are protecting their operations:

AIR FRANCE-KLM:

The European airline group announced in February that it modified its fuel protection strategy, boosting total coverage for annual consumption from 68% to 87%. The company expanded its planning timeline from six quarters to eight while raising protection percentages.

AIR NEW ZEALAND:

The country’s national carrier reported in February that it secured 83% of fuel costs for its fiscal year’s second half and 46% for the first half extending to 2027. Most protection contracts use Brent Crude pricing, with additional Singapore Jet swaps planned for later this year.

CATHAY PACIFIC:

Hong Kong’s primary airline disclosed last year it established fuel protection extending into 2027’s second quarter, securing approximately 30% of expenses through the second quarter of 2026.

CHINA EASTERN AIRLINES:

The government-owned carrier stated it conducted thorough market evaluations and avoided any jet fuel protection transactions during 2025’s first half. By June 30, 2025, the airline maintained no active fuel hedging agreements.

EASYJET:

The British low-cost carrier announced in January it locked in 84% of fuel requirements for 2026’s first half, 62% for the second half, and 43% for 2027’s first half, at average costs of $715, $688, and $671 per metric ton respectively. Currency protection includes 80% of expected dollar needs for the year’s first half at $1.30 per pound, 62% for the second half at $1.24 per pound, and 40% for 2027’s first half at $1.32 per pound.

FINNAIR:

The Finnish airline revised its risk management approach in December, extending protection periods from 18 to 24 months. The carrier secured 219 tons of fuel for the first quarter at $718 per tonne average and 834 tons through 2027’s second quarter at $697 per tonne average. Target protection ranges from 70% to 95% for initial three-month periods, decreasing for subsequent quarters.

IAG:

The British Airways and Iberia parent company reported in February that fuel and currency protection decreased approximately 9% in 2025 compared to the previous year. Company policy involves three-year rolling protection, covering up to 75% of expected short-term needs and up to 80% for budget subsidiaries.

ICELANDAIR:

The Nordic carrier outlined plans in February to protect 20% to 50% of estimated consumption six months forward, 0% to 40% for 7-12 months ahead, and 0-20% for 13-18 months forward. The airline calculated that a 10% fuel price increase would impact equity by $11.6 million.

LUFTHANSA:

The German airline reported last year that fuel protection extends up to 24 months ahead. End-of-2024 coverage included approximately 76% of projected 2025 fuel needs and about 28% of 2026 requirements.

NORWEGIAN AIR:

The Scandinavian carrier announced in February it protected roughly 45% of estimated jet fuel consumption for 2026 and about 25% for 2027.

QANTAS:

The Australian airline disclosed in February that 81% of fuel costs were protected for the second half of its financial year ending June 30, 2026.

RYANAIR:

Irish carrier CEO Michael O’Leary stated in January the company secured 84% protection at $77 per barrel for the current quarter and locked in 80% of jet fuel needs at approximately $67 per barrel.

SAS:

Scandinavia’s largest airline reported last year it temporarily modified fuel protection policies due to market uncertainty, maintaining 0% coverage for the following 12 months. Standard policy targets 40% to 80% of anticipated volumes for upcoming 12 months, allowing up to 50% protection for the subsequent six months.

SINGAPORE AIRLINES:

The carrier announced in November it protects fuel costs up to five years ahead, with 49% coverage through December, 47% through March, declining to 24% in 2027’s second half and 7% in following years. Costs range between $66-$69 per barrel for Brent protection and $79-$87 per barrel for MOPS.

VIRGIN AUSTRALIA:

The Australian airline reported in February it secured 85% of fuel costs and 94% of foreign exchange for its financial year’s second half.

WIZZ AIR:

The Hungarian budget carrier stated in January it protected 83% of jet-fuel needs through March 2026 at prices between $681-$749 per metric tonne. Coverage includes 55% for the full year to 2027 and 7% for 2028, at prices of $650-$716 and $628-$694 per metric tonne respectively.