{"id":442159,"date":"2026-11-13T10:40:13","date_gmt":"2026-11-13T03:40:13","guid":{"rendered":"https:\/\/www.swingfish.trade\/blog\/market-news\/airlines-face-higher-fuel-bills-as-pre-war-hedges-expire-and-jet-fuel-holds-near-150-442159\/"},"modified":"2026-11-13T10:40:13","modified_gmt":"2026-11-13T03:40:13","slug":"airlines-face-higher-fuel-bills-as-pre-war-hedges-expire-and-jet-fuel-holds-near-150","status":"publish","type":"post","link":"https:\/\/www.swingfish.trade\/blog\/market-news\/airlines-face-higher-fuel-bills-as-pre-war-hedges-expire-and-jet-fuel-holds-near-150-442159\/","title":{"rendered":"Airlines face higher fuel bills as pre-war hedges expire and jet fuel holds near $150"},"content":{"rendered":"<div>\n<p dir=\"ltr\">Expiring hedges mean airline earnings will become more exposed to swings in crude, keeping pressure on airline stocks even after this week\u2019s pullback in oil. Any renewed jump in Brent on Middle East shipping risk would now hit airline margins harder, especially in Asia, where fuel\u2019s share of costs has risen to about a third. If airlines lock in new cover at current prices, the hedging demand could also support the deferred part of the oil curve. Higher fares and new fuel surcharges add to inflation pressures that are already keeping central banks hawkish, supporting the case for higher-for-longer rates.<\/p>\n<p dir=\"ltr\">&#8212;<\/p>\n<ul>\n<li>Earlier:<a href=\"https:\/\/investinglive.com\/central-banks\/fed-s-williams-says-inflation-stubbornly-high-and-fed-still-has-work-to-do-on-policy\" target=\"_blank\" rel=\"follow\">Fed\u2019s Williams says inflation stubbornly high and Fed still has work to do on policy<\/a><\/li>\n<\/ul>\n<p dir=\"ltr\">\n<p dir=\"ltr\">&#8212;<\/p>\n<p dir=\"ltr\">\nThe fuel hedges that protected airlines through the first months of the Iran war are expiring, so carriers must lock in costly new cover or take on more risk. Either way, passengers will probably pay more.<\/p>\n<p dir=\"ltr\">Summary:<\/p>\n<ul dir=\"ltr\">\n<li>Fuel hedges set at pre-war prices are expiring, leaving airlines more exposed to high jet fuel costs<\/li>\n<li>Jet fuel is near $148 a barrel, down from nearly $180 at the end of October but well above about $85 before the war<\/li>\n<li>Fuel is now about a third of Asia-Pacific airline operating costs, up from a quarter last year<\/li>\n<li>Executives disagree: Air Astana sees a new normal, while JAL and ANA expect prices to fluctuate or stabilise<\/li>\n<li>Singapore Airlines\u2019 fuel bill jumped 56%, cutting operating profit by 29% despite record revenue<\/li>\n<li>Higher fares and new surcharges risk denting demand and adding to inflation<\/li>\n<\/ul>\n<p dir=\"ltr\">\nAirlines are losing the protection that shielded them through the first months of the Iran war. Fuel hedges struck at pre-war prices are expiring, and carriers face a costly choice over whether to lock in new cover at far higher levels. The squeeze is sharpest in Asia-Pacific, but airlines worldwide face the same dilemma. It is feeding through to higher fares at a time when inflation is already a problem for central banks.<\/p>\n<p dir=\"ltr\">Jet fuel in Singapore, the region\u2019s benchmark, is trading at around $148 a barrel, Reuters reported. That is down from nearly $180 at the end of October but still far above the roughly $85 seen before the conflict began in late February. According to the Association of Asia Pacific Airlines, fuel now accounts for about a third of airline operating costs in the region. Global industry body IATA put fuel at about a quarter of costs last year.<\/p>\n<p dir=\"ltr\">The group\u2019s director general, Wong Hong, described hedging as a very tricky dilemma. He said airlines with cover in place over the past six to eight months had done well, but now face renewing it at much higher prices. Deciding whether to hedge again is effectively a bet on where oil goes next, and executives gathered in Kuala Lumpur this week were divided.<\/p>\n<p dir=\"ltr\">Air Astana\u2019s chief executive, Ibrahim Canliel, said the industry faces a new normal, with Brent likely to stay around $90 to $100. Japan Airlines expects prices to swing up and down and is budgeting for a worst case of $160 a barrel for jet fuel. All Nippon Airways expects fuel costs this financial year to run about 100 billion yen (around $625 million) above plan, though it expects the market to stabilise in the second half.<\/p>\n<p dir=\"ltr\">Singapore Airlines shows the limits of hedging. Its fuel bill jumped 56% to nearly S$4 billion in the six months to September, cutting operating profit by 29% despite record revenue. Before hedging, it paid about $170 a barrel. Hedging gains of around S$730 million brought that down to roughly $145.<\/p>\n<p dir=\"ltr\">Passengers are now carrying more of the cost. JAL will introduce a domestic fuel surcharge for the first time from April. Wong warned that fares cannot keep rising indefinitely, noting that regional passenger growth was negative from April to August and that capacity cuts are a clear risk.<\/p>\n<p dir=\"ltr\">The wider concern is inflation. Airfares feed directly into consumer price indices, and fuel surcharges spread the oil shock well beyond household energy bills. US consumer prices are already running hotter than expected, and central banks from the Fed to the Bank of Japan are focused on persistent price pressures. The airline industry\u2019s struggle with fuel is another way high oil prices are keeping inflation sticky.\u00a0<\/p>\n<p dir=\"ltr\">\n<p>                            This article was written by Eamonn Sheridan at investinglive.com.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Expiring hedges mean airline earnings will become more exposed to swings in crude, keeping pressure on airline stocks even after this week\u2019s pullback in oil. Any renewed jump in Brent on Middle&hellip;<\/p>\n","protected":false},"author":216,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[86],"tags":[],"class_list":["post-442159","post","type-post","status-publish","format-standard","hentry","category-market-news"],"_links":{"self":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/442159","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/users\/216"}],"replies":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/comments?post=442159"}],"version-history":[{"count":0,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/442159\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/media?parent=442159"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/categories?post=442159"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/tags?post=442159"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}