How Jet Fuel Prices Affect Air Travel — and Why the 2026 Crisis Is Grounding Flights

Fuel: The Airline Industry's Biggest Cost

Aviation is one of the most energy-intensive industries in the world. A modern wide-body aircraft like the Boeing 777 or Airbus A350 burns approximately 6,000 to 8,000 litres of jet fuel per hour. A long-haul flight from London to Singapore — approximately 12 hours — consumes around 70,000 to 90,000 litres of fuel. At current 2026 Jet A-1 prices, that single flight's fuel cost exceeds $100,000.

Across the global airline industry, fuel typically represents 20 to 30 percent of total operating costs in normal market conditions. During periods of high oil prices — like the 2022 post-pandemic recovery and the current 2026 crisis — fuel can rise to 35 to 45 percent of operating costs, fundamentally changing the economics of air travel.

Unlike most other industries, airlines cannot easily substitute away from their primary fuel source. Aircraft engines are designed specifically for Jet A-1 (or the equivalent Jet A specification used in North America). There is no viable alternative fuel that can be used in commercial quantities in existing aircraft engines, though sustainable aviation fuel (SAF) is being developed and deployed in small volumes.

What Is Jet A-1?

Jet A-1 is the international standard specification for aviation turbine fuel used in commercial jet aircraft. It is a kerosene-based fuel with a freezing point of -47°C (compared to -40°C for the North American Jet A specification), which allows it to be used on long-haul polar routes where temperatures at altitude can fall below -50°C.

Jet A-1 is produced by refining crude oil. The refining process separates crude oil into fractions based on boiling point: lighter fractions become gasoline and naphtha, middle fractions become kerosene and jet fuel, and heavier fractions become diesel, heating oil, and fuel oil. Jet A-1 sits in the middle distillate range, alongside diesel and heating oil.

This is why OilCrisisTracker.com uses NYMEX Heating Oil futures (HO=F) as a proxy for jet fuel prices. Heating oil and jet fuel are chemically similar middle distillates produced from the same crude oil fraction. The primary differences are in additives and specifications: jet fuel requires additional anti-static and anti-icing additives that are not required for heating oil. The IATA Jet Fuel Monitor uses a standard markup of approximately 16.5 percent over heating oil futures to estimate Jet A-1 prices, which is the methodology we follow.

How Airlines Manage Fuel Costs

Airlines use several strategies to manage their exposure to jet fuel price volatility. The most important is fuel hedging: buying financial contracts (futures, options, or swaps) that lock in a fixed price for future fuel purchases. If the market price rises above the hedged price, the airline receives a payment that offsets the higher cost. If the market price falls, the airline pays a premium but benefits from lower actual fuel costs.

Hedging strategies vary significantly between airlines. Some carriers, like Southwest Airlines in the United States, have historically been aggressive hedgers and have benefited substantially during oil price spikes. Others, like Ryanair and many low-cost carriers, hedge less aggressively and pass fuel cost fluctuations more directly to passengers through fuel surcharges.

The 2026 crisis has caught many airlines with insufficient hedge coverage. The rapid and sustained nature of the price increase — driven by the Hormuz disruption rather than the more gradual demand-driven increases that airlines typically hedge against — has exceeded the coverage of many hedging programmes. Airlines that hedged at $80 to $90 per barrel for Brent are now facing unhedged exposure at $90+ levels.

Beyond hedging, airlines manage fuel costs through operational efficiency measures: flying at optimal altitudes and speeds to minimise fuel burn, reducing aircraft weight (including by reducing water and catering loads), using single-engine taxiing, and optimising flight routes to take advantage of favourable winds. These measures can reduce fuel consumption by 5 to 15 percent compared to unoptimised operations.

Fuel Surcharges and Ticket Prices

When fuel costs rise significantly, airlines typically respond by introducing or increasing fuel surcharges — additional fees added to ticket prices specifically to recover higher fuel costs. These surcharges are separate from the base fare and are often listed as "YQ" or "YR" charges on airline tickets.

The 2026 crisis has prompted most major international carriers to implement substantial fuel surcharges. Long-haul routes — which consume the most fuel — have seen the largest surcharge increases. A return flight from Europe to Asia that might have carried a fuel surcharge of $50 to $100 in 2024 may now carry a surcharge of $200 to $400, depending on the carrier and route.

Short-haul routes are less affected in absolute terms but may see proportionally larger impacts on ticket prices, since fuel represents a higher percentage of the total cost of a short flight (where fixed costs like crew, landing fees, and aircraft depreciation are spread over fewer passengers and less distance).

Route Cancellations and Capacity Reductions

When fuel prices reach levels that make certain routes unprofitable, airlines respond by reducing capacity or cancelling routes entirely. The routes most vulnerable to cancellation are those with thin profit margins: secondary routes between smaller cities, routes with low load factors, and routes where passengers have limited willingness to pay higher fares.

The 2026 crisis has prompted several major airlines to announce capacity reductions on routes that transit or are affected by the Hormuz disruption. Middle Eastern carriers — which are among the world's largest long-haul operators and whose hub airports (Dubai, Abu Dhabi, Doha) are directly in the affected region — have been particularly affected.

Some carriers have also been forced to reroute flights to avoid Iranian airspace, which has been restricted during the conflict. Rerouting adds flight time and fuel consumption, further increasing costs. Flights that previously transited Iranian airspace on routes between Europe and South/Southeast Asia now face detours of 30 to 90 minutes, adding significant fuel costs to each flight.

Sustainable Aviation Fuel: A Long-Term Solution

The 2026 crisis has intensified interest in sustainable aviation fuel (SAF) as a long-term solution to the aviation industry's oil price vulnerability. SAF is produced from non-petroleum feedstocks including waste oils, agricultural residues, and municipal solid waste. It can be blended with conventional Jet A-1 in proportions of up to 50 percent (and potentially higher with further certification) without requiring any modifications to aircraft engines or fuelling infrastructure.

However, SAF currently costs 3 to 5 times more than conventional Jet A-1, and global production capacity is a tiny fraction of the aviation industry's fuel needs. Even with the current oil price spike, SAF is not yet cost-competitive with conventional jet fuel in most markets. Scaling up SAF production to meaningful levels will require years of investment and policy support.

In the near term, the aviation industry has no alternative to conventional Jet A-1. The 2026 crisis will therefore continue to affect air travel costs, route networks, and airline profitability until either oil prices normalise or the Hormuz disruption is resolved.

Tracking Jet Fuel Prices

OilCrisisTracker.com displays the current Jet A-1 price estimate on the homepage alongside Brent crude, WTI, and natural gas. The jet fuel price is derived from NYMEX Heating Oil futures using the IATA standard 16.5 percent markup. Country pages show estimated jet fuel reserve levels in days of supply, allowing users to assess which countries face the most acute aviation fuel security risk.