Some airlines use futures and options to hedge against price increases as jet fuel trades near all-time highs
Higher oil prices due to the Iran war are increasing prices of jet fuel, which accounts for a big portion of airlines’ costs.
Brent crude oil rose near $100 per barrel on Thursday on worries about disrupted supply.
Spot Northwest European jet fuel prices were at $1,536 per metric tonen on Thursday, trading near an all-time high of $1,633 they reached intra-day on Monday.
Some airlines use futures and options to hedge against price increases. They also try to hedge against value changes in the US dollar, in which jet fuel is priced.
Read: How many ships have been attacked in the Gulf since start of Iran war?
US airlines, which abandoned the practice of hedging against fuel costs, could be the hardest hit if the war is prolonged.
Below is a summary of how some of the world’s biggest airlines are hedged:
Air France-KLM
The Franco-Dutch group said in February it had adjusted its fuel hedging policy to increase its total exposure over one year consumption to 87% from 68%. It said it had extended its hedging horizon to eight quarters from six and increased hedging percentages.
Air New Zealand
New Zealand’s flag carrier said in February it was hedging 83% of fuel for the second half of its financial year and 46% for the first half of the year to 2027. It said the majority of its hedges were in Brent Crude, with some opportunistic Singapore Jet swaps expected in the second half of this year.
Cathay Pacific
Hong Kong’s flagship carrier said last year it was hedging fuel into the second quarter of 2027, covering around 30% of costs until the second quarter of 2026.
China Eastern Airlines
The state-owned airline said it made careful assessments based on the derivatives market conditions and did not carry out any jet fuel hedging transactions in the first half of 2025. As of June 30, 2025, it had no outstanding jet fuel hedging contracts.
Easy Jet
The British budget airline said in January it had hedged 84% of its fuel needs for the first half of 2026, 62% for the second and 43% for the first half of 2027, at an average cost of $715, $688 and $671 per metric tonne, respectively.
It has 80% of the dollars it expects to need in 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
The Finnish carrier updated in December its risk management policy to extend the hedging horizon to 24 months from 18 months previously.
It has covered 219 tonnes of fuel for the first quarter at an average price of $718 per tonne and a total 834 tonnes of fuel through the second quarter of 2027, at an average price of $697 per tonne. It aims for a hedging ratio of about 70% to 95% for the first three months of the hedging period and lower hedging ratio limits for each following quarter.
IAG
The owner of British Airways and Iberia said in February its fuel and currency hedging was down about 9% in 2025 compared to a year before.
It said its policy includes hedging on a three-year rolling basis, with hedging of up to 75% of expected near-term requirements near-term, and up to 80% for low-cost airlines.
Icelandair
The Icelandic carrier said in February it planned to hedge between 20% and 50% of estimated fuel consumption six months forward, 0% to 40% 7-12 months forward and 0-20% 13-18 months forward.
It said a 10% increase in fuel prices would have an impact of $11.6 million on its equity.
Lufthansa
The German carrier said last year its fuel hedging has a horizon up to 24 months. It said its hedging at the end of 2024 covered about 76% of forecast 2025 fuel requirement and about 28% of forecast 2026 requirement.
Norwegian Air
The Norwegian carrier said in February it had hedged about 45% of estimated jet fuel consumption for 2026 and about 25% for 2027.
Qantas
The Australian airline reported in February it had 81% of its fuel hedged for the second half of its financial year ending June 30, 2026.
Ryanair
The airline had covered about 77% of its estimated fuel needs for its fiscal year to the end of March 2026 at an average price of about $761 per metric ton.
For the upcoming year, it said in January it had locked in about 80% of its jet fuel requirements based on a crude oil price of $67 per barrel.
SAS
The biggest Scandinavian airline said last year it had temporarily adjusted its fuel hedging policy due to uncertain market conditions and that it had 0% of fuel consumption hedged for the following 12 months.
The company’s hedging 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
The company said in November 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 reducing to 24% in the second half of the full-year to 2027 and 7% in the following years.
It said it was paying between $66 and $69 per barrel of Brent hedged, and between $79 and $87 per barrel of MOPS.
Virgin Australia
The Australian airline said in February it was hedging 85% of fuel and 94% of foreign exchange for the second half of its financial year.
Wizz Air
The Hungarian budget carrier said in January it was hedging 83% of its jet-fuel needs for the year to March 2026 at a price between $681-$749 per metric tonne.
It said it had coverage of 55% for the full-year to 2027 and 7% for the full-year to 2028, at a price of $650-$716 per metric tonne and $628-$694 per metric tonne, respectively.
