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Airlines' fuel price strategies falling short

Bangkok Post

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March 13, 2026

As a sharp rise in oil prices rattles global transport markets, airlines face an additional threat: the price of jet fuel has risen far faster than crude prices.

- JULIE ZHU ALESSANDRO PARODI

Airlines' fuel price strategies falling short

A Cathay Pacific aircraft taxis at Hong Kong International Airport in 2024.

(REUTERS)

Even airlines that use hedging contracts to protect against sudden spikes in oil prices are rapidly announcing fare hikes, fuel surcharges and capacity cuts as they grapple with an unprecedented jump in refining margins since the start of the US-Israeli war on Iran.

Jet fuel prices normally move in tandem with oil prices, but they have doubled since the Iran conflict, far outpacing a one-third rise in crude prices, casting a shadow over margins and rattling carriers around the world.

"It's a dramatic increase," Cathay Pacific Airways Chief Financial Officer Rebecca Sharpe said in Hong Kong after reporting earnings on Wednesday. "Our hedging is on crude oil rather than jet fuel. And therefore, while we do have some protection from that hedging, obviously, it's not protecting against the jet fuel price in totality."

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