Asian Airlines Weigh Fuel Hedges as Jet Prices Climb
Carriers facing expiring jet fuel hedge contracts must decide whether to lock in prices after a 75% rise in Asia since the Middle East war began.
Updated on Nov. 13, 2026 in Oil and Gas
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Asian airlines face expiring jet fuel hedge contracts and must decide whether to hedge at current prices or go unhedged. Jet fuel in Asia is about 75% higher than before the Middle East war began, now priced at $148 per barrel.
Why it matters
Jet fuel now accounts for 33% of airline operating costs, up from 25% before the war, squeezing carrier profitability. Airlines are planning to raise ticket prices, which could pass the cost burden on to travelers.
Japan Airlines paid $160 per barrel for jet fuel between April and September and is budgeting for a worst-case price of $160 per barrel. Jet fuel's share of operating costs has risen from 25% before the war to 33% now.
The players
Japan Airlines
Japan Airlines is a major Japanese carrier whose fuel budgeting and hedging decisions illustrate the pressure facing Asian airlines.
Air Astana
Air Astana is the flag carrier of Kazakhstan, whose chief executive has said fuel prices may stay near current levels as a new normal.
The details
Airlines use jet fuel hedge contracts to lock in fuel prices, and carriers whose contracts are expiring must choose between hedging at current prices or going unhedged. Industry figures show sharp drops in airline profitability as the cost of fuel rises across the sector.
Timeline
April 2026: Japan Airlines begins paying $160 per barrel for jet fuel.
September 2026: Japan Airlines' $160 per barrel fuel payment period ends.
October 2026: Jet fuel prices peak near $180 per barrel.
Season Trajectory
Airlines hedging through the 2026 Middle East war spike face a choice between locking in costs near $148 per barrel and risking further swings. Whether fuel stays elevated or cycles lower, carriers' pricing and profitability will reflect that decision.
Higher jet fuel costs may translate into higher airfares for travelers as airlines plan to raise ticket prices. Frequent flyers should expect fares to reflect these cost pressures in coming months.
The takeaway
Fuel is now a larger share of airline costs, so travelers booking flights should expect fares to rise as carriers pass costs along. Watching how airlines handle expiring hedges offers a clear signal of where fares may head.
Further reading
Explore more Oil and Gas coverage for context on how fuel price swings shape the wider energy market.
Source note: This article includes information reported by OilPrice.
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