European airlines are facing their biggest challenge since the COVID-19 pandemic as the Iran war pushes up jet fuel prices and buffets travel through the Middle East, casting a shadow over the summer holiday season.
Carriers have been largely riding out the crisis with hedges that have tamed costs even as the price of jet fuel has risen nearly 84% since the start of the conflict on 28 February.
"There is a risk that we'll see rationing of fuel supply, particularly in Asia and Europe," Willie Walsh, head of the International Air Transport Association said.
Walsh said, however, that the situation was not yet as bad as the disruption caused by the COVID-19 pandemic in 2020, which led to travel demand plummeting and hundreds of billions of dollars in losses for the aviation sector.
"I think COVID was on a completely different scale," Walsh added.
Jet fuel price hedges start to run out
The war has hit airline shares, with on-again-off-again peace talks to end the conflict and re-open the critical Strait of Hormuz to normalise global oil and gas flows in what is the worst energy crisis in decades.
Airlines are now warning about their hedges, which help lock in set prices - running out, with outlooks increasingly murky as people delay booking travel or make plans closer to home to avoid potential disruption and higher fares.
Sweden's Energy Minister Ebba Busch on Tuesday fired an "early warning" about potential jet fuel shortages despite good current supply, cautioning Swedes to think through travel plans.
European budget airline Wizz Air CEO József Váradi said on Monday that summer bookings were strong. However, easyJet and tour operator TUI announced declines in forward bookings and issued profit warnings in recent weeks.
Váradi, meanwhile, cautioned that even an end to the conflict would not quickly resolve high fuel prices.
"Even if the war is stopped in Iran, I don't think this is going to put the fuel price back to what it used to be two months ago," he told reporters in London.
Winners and losers
Gulf airlines have been the hardest hit, with data from Cirium Ascend showing that flights operated by Middle Eastern operators dropped 50% year-on-year in March, while bookings for Q2 and Q3 connecting via the main Gulf hubs are down 42.5%.
Global passenger capacity, however, remains up near 2% so far in 2026 versus 2025, it said, underscoring wider resilience.
The crisis has though dampened margins and sharpened the gap between weaker and stronger players.
Some have dodged the impact. Finland's flag carrier Finnair said the crisis had so far had a net positive impact with more demand for its Asian flights. Budget airline Norwegian on Tuesday brushed off jet fuel supply risks.
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U.S. President Donald Trump says Iran has a "last chance" to sign what he described as "a good document", claiming talks are continuing at Tehran's request with backing from Saudi Arabia, the UAE and Qatar.
U.S. President Donald Trump said late on Saturday he would hold off on a fresh attack on Iran as long as a deal could be reached quickly to halt Iran's nuclear ambitions and reopen the Strait of Hormuz.
Indonesian rescue teams are searching for 28 people still unaccounted for, three days after a passenger ferry caught fire off the coast of Madura island.
Two firefighting helicopters collided while battling a major wildfire in Greece on Sunday, killing two crew members as emergency services continued efforts to contain fires fuelled by extreme heat and dry conditions across Europe.
At least eight people were killed in overnight Ukrainian drone strikes across Russia, regional officials said, as Kyiv expanded attacks on infrastructure.
Tehran had made plans to strike sites in Ukraine after Kyiv attacked an Iranian cargo ship in the Caspian Sea, a senior Iranian military adviser has said. Iran refrained from taking action after Kyiv said the strike was a mistake, Mohsen Rezaei told the state IRIB TV channel.
U.S. President Donald Trump says Iran has a "last chance" to sign what he described as "a good document", claiming talks are continuing at Tehran's request with backing from Saudi Arabia, the UAE and Qatar.
U.S. President Donald Trump said late on Saturday he would hold off on a fresh attack on Iran as long as a deal could be reached quickly to halt Iran's nuclear ambitions and reopen the Strait of Hormuz.
Yemen's Houthi-run maritime coordination body on Saturday denied reports that it planned to charge commercial ships transiting the Bab el-Mandeb Strait. It said no such decision had been made and that passage through the strategic waterway remains free.
Saudi Arabia, Qatar, Jordan and Kuwait on Friday welcomed an agreement to implement the next phase of the comprehensive peace plan for the Gaza Strip, urging Israel to fully comply with the deal, withdraw its forces.
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