Fuel Price Crisis Forces Airline Cancellations: Which Carriers Are Most Resilient?
If you have summer travel plans involving flights, prepare for significantly higher costs. Airfares are climbing rapidly as global conflicts disrupt fuel markets, with jet fuel prices reaching their highest level in four years. Scandinavia's largest airline has become the first major European carrier to cancel flights due to these unprecedented fuel price increases.
The Fuel Price Shock
Jet fuel prices surged 58.4% last week according to International Air Travel Association data, creating immediate consequences for airlines and passengers worldwide. The US-Israeli war on Iran and ensuing Middle East violence has disrupted key oil export routes, particularly the Strait of Hormuz which handles approximately one-fifth of global oil supply.
"The increase in fuel cost is going to be passed on to the passenger, that's not in question," says Marina Efthymiou, Professor of Aviation Management at Dublin City University. "But the extent to which it is passed on depends on the market and how much the airline has hedged against fuel price increases."
Which Airlines Are Best Protected?
Fuel typically represents 20-40% of airlines' total operating costs. Many carriers use hedging strategies—securing fuel supplies at fixed or capped prices months or years in advance—to protect against volatile markets. Airlines known to employ hedging include:
- British Airways
- Virgin Atlantic
- easyJet
- Ryanair
Ryanair's deputy head of communications confirmed the Irish carrier faces no immediate price increases, stating they are "well hedged for the next 12 months." In contrast, several major US airlines historically avoid hedging, making them more vulnerable to short-term price shocks.
SAS, the flag carrier for Denmark, Norway and Sweden, announced it will scale back hundreds of flights this week in response to what it called a "sharp and sudden increase" in jet fuel costs. Most cancellations affect short routes within Scandinavia where alternative connections remain available.
Global Airfare Increases Already Underway
Multiple airlines have already announced price hikes, including:
- Qantas
- SAS
- Air New Zealand
Brent crude oil prices exceeded $100 per barrel last week for the first time since 2022, while jet fuel prices soared from $85-90 per barrel before the conflict to between $150-200. Despite a temporary stabilization on March 9, prices climbed back above $100 after subsequent attacks on fuel infrastructure.
What Travelers Need to Know
James Noel-Beswick, head of commodities at oil market intelligence firm Sparta, warned on BBC's Today programme: "I think we're weeks rather than months away from seeing cancellations and delays due to jet fuel shortages." He added that even if the conflict resolves soon, refinery damage repairs are "unlikely to be before the summer holiday season."
For passengers, experts recommend:
- Be selective about airlines: Choose carriers with strong hedging positions
- Consider travel insurance carefully: Read policies thoroughly as acts of war and civil unrest are typically excluded
- Monitor alternative destinations: Current data shows relatively lower airfare increases for flights to Germany, Spain, Ireland, and Italy
Suzanne Morrow, CEO of travel insurance agency InsureMyTrip, notes that insurance is "designed to make you whole," but if airlines offer rebooking or refunds, you may not have a valid claim.
The Broader Impact
The aviation industry faces significant challenges as fuel accounts for up to a quarter of operating costs. With oil prices approximately 29% higher than before the conflict began, analysts fear a potential travel slump if the war persists. The Strait of Hormuz blockade alone traps nearly 20 million barrels of oil daily within the Gulf, representing roughly $600 billion in annual trade.
As attacks on tankers, refineries, and oil infrastructure continue across Western Asia, the travel industry prepares for continued turbulence. Professor Efthymiou concludes: "Because of hedging, certain airlines are going to be more exposed to price shocks than others. If the question is which airline will perform better during the coming crisis, it's the airlines that have done the most hedging."
