The price of jet fuel, used by airplanes, has doubled in the last month due to the increase in crude oil prices following the Iran war. This pressure has already been passed on to airlines, which have moderated the growth of air travel supply. Fuel accounts for, on average, up to 30% of an airline's total costs, a percentage that has increased in recent weeks due to the dizzying rise in jet fuel prices. The International Air Transport Association (IATA) highlights that the price of a barrel of jet fuel went from selling for $99.4 on February 27, one day before the start of the joint military offensive by the US and Israel against Iran, to $195.19 on March 27, the last day for which records exist, representing a 96.36% increase. Specifically, in Europe the barrel is at $198.86, while in Asia it rises to $208.79, which has caused airlines to increase their fuel hedging. To avoid this volatility, airlines protect themselves through hedging, which guarantees a portion of their medium-term consumption (between 40% and 70%) at a fixed price, so they buy a large percentage of their needed fuel at a fixed price for months and the rest at market price. International Airlines Group (IAG), to which British Airways, Iberia, Vueling, Aer Lingus and Level belong, points out in its annual report that it seeks to reduce the impact of volatility by hedging in advance, 'responding to both significant reductions in demand and sudden changes in fuel.' The policy works on a three-year basis, with hedging of up to 75% of expected needs in the short term, which decreases to 20% in the last year, although IAG sources detail that the global coverage figure for 2026 is approximately 62%. Air Europa confirms it has hedging to avoid these sharp movements, although it does not specify the existing percentage, and Volotea, for its part, confirms that the volatility has led to adjustments in its program that have led to the cancellation of certain flights. Ryanair highlights that it has 70% coverage of its fuels, but warns that if the conflict persists from May onwards, it will 'put 25% of the company's supplies at risk.' The conflict moderates the increase in seats and demand The latest IATA market analysis on passenger transport, published this Tuesday, already details that while in February the global seat capacity increased by 3.9% compared to the same month of 2025, in March that growth moderated to 3.3% and for April it is expected to slow that rise to 2.7%. All this as a consequence of the rise in oil and the reduction in traffic flows between Asia and Europe, and between Africa and Asia. Likewise, IATA itself moderated its demand growth forecast for this Thursday, since while that forecast contemplated a 5% increase, it has been reduced to 3.3% due to the impact of the war in the Middle East. IATA Director General Willie Walsh stated that there are 'some things that are clear' due to the war, such as fuel costs are 'increasing considerably,' which leads to an increase in ticket prices and the containment of spending.
