Rising crude prices tied to conflict in Iran have pushed jet fuel costs sharply higher, amplifying a major expense line for airlines worldwide. Brent crude moved near $100 per barrel and spot Northwest European jet fuel traded at $1,536 per metric ton on Thursday, near a midweek intra-day high of $1,633.
Faced with these moves, a number of airlines are relying on derivatives - primarily futures, swaps and options - to lock in fuel costs and, in many cases, to hedge foreign exchange exposure for the U.S. dollar in which jet fuel is priced. The levels of protection vary markedly across carriers, reflecting different risk tolerances, existing policies and views on future prices.
Below is a company-by-company account of hedging positions and policies as disclosed by the carriers:
- Air France-KLM: In February the Franco-Dutch group said it had revised its fuel hedging approach to raise total exposure over one year consumption to 87% from 68%. The group also extended its hedging horizon to eight quarters from six and raised the hedging percentages applied within that window.
- Air New Zealand: The New Zealand flag carrier said in February it had hedged 83% of fuel for the second half of its financial year and 46% for the first half of the year to 2027. It said most of its hedges are linked to Brent crude, with some opportunistic Singapore Jet swaps anticipated in the second half of this year.
- Cathay Pacific: Hong Kong’s flagship carrier said last year it had hedged fuel positions into the second quarter of 2027, covering roughly 30% of costs through the second quarter of 2026.
- China Eastern Airlines: The state-owned carrier reported it made careful assessments based on derivatives market conditions and did not carry out any jet fuel hedging transactions in the first half of 2025. As of 30 June 2025, it reported no outstanding jet fuel hedging contracts.
- easyJet: In January the British low-cost carrier said it had hedged 84% of fuel needs for the first half of 2026, 62% for the second half of 2026, and 43% for the first half of 2027. The hedged average costs were $715, $688 and $671 per metric ton for those periods respectively. easyJet also disclosed currency hedges: 80% of expected U.S. dollars for the first half of the year bought at $1.30 per British pound, 62% for the second half at $1.24 per pound, and 40% for the first half of 2027 at $1.32 per pound.
- Finnair: Finnair updated its risk management in December, extending the hedging horizon to 24 months from 18 months. It reported covering 219 tons of fuel for the first quarter at an average price of $718 per ton and a total of 834 tons of fuel through the second quarter of 2027 at an average of $697 per ton. The company targets a hedging ratio of about 70% to 95% for the first three months of the hedging period, with lower hedging ratio limits for each subsequent quarter.
- IAG (owner of British Airways and Iberia): In February the group said its fuel and currency hedging was down about 9% in 2025 compared with a year earlier. IAG stated its policy operates on a three-year rolling basis, allowing hedging of up to 75% of expected near-term requirements and up to 80% for low-cost airlines within the group.
- Icelandair: The carrier said in February it planned to hedge between 20% and 50% of estimated fuel consumption six months forward, 0% to 40% for 7-12 months forward, and 0% to 20% for 13-18 months forward. It also disclosed that a 10% rise in fuel prices would have an $11.6 million impact on its equity.
- Lufthansa: The German carrier said last year its fuel hedging horizon extends up to 24 months. At the end of 2024 it had hedged about 76% of its forecast 2025 fuel requirement and about 28% of its forecast 2026 requirement.
- Norwegian Air: In February the carrier reported it had hedged roughly 45% of estimated jet fuel consumption for 2026 and about 25% for 2027.
- Qantas: The Australian airline said in February it had 81% of its fuel hedged for the second half of its financial year ending June 30, 2026.
- Ryanair: Ryanair said it had covered about 77% of estimated fuel needs for its fiscal year ending March 2026 at an average price of about $761 per metric ton. It added that for the upcoming year it had locked in about 80% of its jet fuel requirements based on a crude oil price of $67 per barrel.
- SAS: The largest Scandinavian airline said last year it had temporarily modified its fuel hedging policy owing to uncertain market conditions and that it had 0% of fuel consumption hedged for the following 12 months. Its stated policy targets between 40% and 80% of anticipated volumes for the coming 12 months and allows hedging up to 50% for the following six months.
- Singapore Airlines: In November the carrier said it was hedging fuel for up to five years, with 49% of fuel covered in the quarter to December, 47% in the quarter to March, dropping to 24% in the second half of the full-year to 2027 and 7% in the ensuing years. It disclosed paying between $66 and $69 per barrel of Brent hedged, and between $79 and $87 per barrel of MOPS.
- Virgin Australia: In February Virgin Australia said it was hedging 85% of fuel and 94% of foreign exchange for the second half of its financial year.
- Wizz Air: The Hungarian low-cost carrier reported in January it was hedging 83% of its jet-fuel needs for the year to March 2026 at prices between $681 and $749 per metric ton. It said it had coverage of 55% for the full-year to 2027 and 7% for the full-year to 2028, at prices of $650-$716 per metric ton and $628-$694 per metric ton respectively.
These disclosures show a broad range of approaches - from multi-year hedging programs covering a substantial share of expected consumption to more cautious stances, including carriers with no active hedges for the next 12 months. Several airlines have lengthened their hedging horizons or increased their hedged proportions in recent months.
U.S. carriers were noted as particularly exposed because many abandoned routine fuel-cost hedging practices in prior years. The analysis indicates U.S. airlines could be the hardest hit if the Iran-related war is prolonged, given the recent escalation in oil prices and the fact that jet fuel is priced in U.S. dollars.
The hedging strategies reported also often include foreign-exchange hedges to manage the dollar exposure inherent in jet fuel purchasing, as illustrated by easyJet and Virgin Australia disclosing FX coverage alongside fuel hedges.
While the specific instruments and percentages differ, the shared objective is to reduce volatility in operating costs arising from sudden spikes in crude and refined fuel prices. The disclosures also reveal trade-offs companies accept - locking in prices now can protect against near-term spikes but may leave airlines exposed to lower prices should markets soften subsequently.
Investors and market participants tracking airline margins will be watching how these hedging programs perform as jet fuel prices evolve and whether carriers adjust their hedging horizons and ratios further in response to market moves.