In my column published on April 22, “Aviation in the Face of the Great Slowdown,” I was already analyzing the surge in jet fuel following the outbreak, on February 28, 2026, of the conflict in Iran.
This shock now imposes concrete decisions: which routes to keep, at what price, and with which aircraft?
For an industry whose margins remain structurally thin, a sustained rise in fuel can quickly undermine the profitability of a single route, then the network, and in the most fragile cases, even threaten the survival of a company.
This shock now imposes concrete decisions: which routes to keep, at what price, and with which aircraft?
For an industry whose margins remain structurally thin, a sustained rise in fuel can quickly undermine the profitability of a single route, then the network, and in the most fragile cases, even threaten the survival of a company.
An Immediate Shock to Margins That Are Razor-Thin
Fuel, alongside staff, constitutes one of the main expenditure items for an airline.Its weight varies with the fleet, the business model, and the price of fuel.
But with margins often limited to just a few euros per passenger, a sustained rise can quickly erase the anticipated profit.
Filling the aircraft is no longer enough. A route with a load factor of 95% can easily lose money if it mainly carries passengers who bought low-cost tickets.
Fuel Hedging Only Delays the Hit
Fuel hedges temporarily shield margins. They allow certain carriers to keep their fares while competing players already bear the higher costs.
But they do not eliminate either the risk on uncovered volumes or the risk of renewing contracts at higher prices.
The dollar adds a currency risk: a company whose revenues are collected in a weaker currency can simultaneously face the rise of jet fuel and that of its invoicing currency.
Ryanair illustrates the advantage, but also the limits, of this protection. For its fiscal year from April 2026 to March 2027, the group hedged 80% of its jet fuel needs at around $67 per barrel. In the first quarter, the 20% uncovered cost nearly $150 per barrel, more than double year over year, while the average fare fell by 6%. Despite hedging, the fuel bill rose by 16% and net income fell by 34%.
Qatar Airways illustrates another trade-off. Its chief executive, Hamad Al-Khater, calls the current crisis the most significant in the airline’s history. In an interview with Bloomberg TV reported on September 20, he mentions jet fuel around $182 per barrel, about 90% above its level at the end of February 2026. Qatar is not yet passing this extra cost directly to passengers: it is prioritizing the most profitable routes and temporarily suspending less performing services.
Fuel no longer weighs solely on margins; it also shapes capacity and the network.
But they do not eliminate either the risk on uncovered volumes or the risk of renewing contracts at higher prices.
The dollar adds a currency risk: a company whose revenues are collected in a weaker currency can simultaneously face the rise of jet fuel and that of its invoicing currency.
Ryanair illustrates the advantage, but also the limits, of this protection. For its fiscal year from April 2026 to March 2027, the group hedged 80% of its jet fuel needs at around $67 per barrel. In the first quarter, the 20% uncovered cost nearly $150 per barrel, more than double year over year, while the average fare fell by 6%. Despite hedging, the fuel bill rose by 16% and net income fell by 34%.
Qatar Airways illustrates another trade-off. Its chief executive, Hamad Al-Khater, calls the current crisis the most significant in the airline’s history. In an interview with Bloomberg TV reported on September 20, he mentions jet fuel around $182 per barrel, about 90% above its level at the end of February 2026. Qatar is not yet passing this extra cost directly to passengers: it is prioritizing the most profitable routes and temporarily suspending less performing services.
Fuel no longer weighs solely on margins; it also shapes capacity and the network.
Medium-Haul: Reducing Without Undermining the Network
On the medium-haul, airlines have a degree of flexibility. They can cut a frequency, suspend a route during the winter, close a base, or redeploy an aircraft to a more profitable destination.
The first casualties will be the marginal routes: those kept to fill a slot, defend a market position, or deter a competitor from entering, but whose profitability remains insufficient.
Moving from three daily flights to two more-filled rotations reduces overall consumption. But this saving can make the offering less attractive to business travelers and reduce the chances for connections.
The major low-cost carriers, with their low unit costs and their ability to redeploy aircraft, can profit from the withdrawal of weaker players.
Traditional carriers have other advantages: premium customers, cargo and connections. Yet their cost structure and the interdependence of routes complicate capacity reductions.
The first casualties will be the marginal routes: those kept to fill a slot, defend a market position, or deter a competitor from entering, but whose profitability remains insufficient.
Moving from three daily flights to two more-filled rotations reduces overall consumption. But this saving can make the offering less attractive to business travelers and reduce the chances for connections.
The major low-cost carriers, with their low unit costs and their ability to redeploy aircraft, can profit from the withdrawal of weaker players.
Traditional carriers have other advantages: premium customers, cargo and connections. Yet their cost structure and the interdependence of routes complicate capacity reductions.
Will We Need to “Break Up the Schedules”?
During the IFTM 2026 trade show, last week, one of France’s leading aviation experts told me: “To get out of this, we’ll have to break up the schedules.” It may no longer be enough to simply suspend a few underperforming routes.
For the most exposed airlines, it will be necessary to reconsider the very architecture of their network, abandon certain historic positions, and concentrate resources on the routes that can preserve cash flow.
The task is particularly difficult. Routes do not operate independently. Some feed a hub or enable a profitable long-haul connection.
Removing a seemingly loss-making service can therefore weaken other routes that seemed profitable. Modifying a program already marketed also incurs costs: rerouting passengers, refunding tickets, reorganizing crews, losing connections, and tarnishing the airline’s image.
For the most exposed airlines, it will be necessary to reconsider the very architecture of their network, abandon certain historic positions, and concentrate resources on the routes that can preserve cash flow.
The task is particularly difficult. Routes do not operate independently. Some feed a hub or enable a profitable long-haul connection.
Removing a seemingly loss-making service can therefore weaken other routes that seemed profitable. Modifying a program already marketed also incurs costs: rerouting passengers, refunding tickets, reorganizing crews, losing connections, and tarnishing the airline’s image.
Who Will Trim Capacity First?
A reduction in capacity can improve load factors and support fares. But no airline necessarily wants to be the first to act.
Each may hope that a competitor will drop frequencies or abandon a route before them. They could then maintain their offering, win back some passengers, and benefit from price increases triggered by capacity reductions.
We are witnessing a form of poker game. The carrier that cuts its schedule first risks giving up slots and market share. Those that wait too long may continue to operate flights that drain their cash flow.
Capacity discipline is gaining ground: Lufthansa has already announced short-haul reductions, while Air France-KLM is curbing growth and redeploying aircraft toward the most promising markets. Reducing a network can be decided quickly. Rebuilding it may take years.
Each may hope that a competitor will drop frequencies or abandon a route before them. They could then maintain their offering, win back some passengers, and benefit from price increases triggered by capacity reductions.
We are witnessing a form of poker game. The carrier that cuts its schedule first risks giving up slots and market share. Those that wait too long may continue to operate flights that drain their cash flow.
Capacity discipline is gaining ground: Lufthansa has already announced short-haul reductions, while Air France-KLM is curbing growth and redeploying aircraft toward the most promising markets. Reducing a network can be decided quickly. Rebuilding it may take years.
The Passenger Will Ultimately Pay
The rise in fuel costs will not be immediately passed on to tickets.
On a highly competitive route, an airline cannot raise fares alone without losing customers. It will probably start by reducing promotions, limiting the cheapest fare classes, and increasing ancillary revenues: baggage, seats, priority boarding, or onboard services.
The reduction in capacity can also help sustain prices: when a service disappears or a competitor pulls out, seats become scarcer. The passenger may then face higher-priced tickets, less choice, and less convenient schedules.
On a highly competitive route, an airline cannot raise fares alone without losing customers. It will probably start by reducing promotions, limiting the cheapest fare classes, and increasing ancillary revenues: baggage, seats, priority boarding, or onboard services.
The reduction in capacity can also help sustain prices: when a service disappears or a competitor pulls out, seats become scarcer. The passenger may then face higher-priced tickets, less choice, and less convenient schedules.
Can Fuel Trigger Bankruptcies?
Fuel rarely causes the bankruptcy of an airline on its own. It acts more as a revealer and sometimes as the final detonator.
The most threatened carriers will be those with insufficient cash reserves, high indebtedness, expensive aircraft leases, an aging fleet, weak fuel hedging, and unprofitable routes.
Independent carriers without a major shareholder, some regional operators, and long-haul models that rely primarily on very low fares appear particularly vulnerable.
Therefore, the first airline to fail will not necessarily be the one that consumes the most fuel, but the one with the least time to react and not enough money to hold on.
The most threatened carriers will be those with insufficient cash reserves, high indebtedness, expensive aircraft leases, an aging fleet, weak fuel hedging, and unprofitable routes.
Independent carriers without a major shareholder, some regional operators, and long-haul models that rely primarily on very low fares appear particularly vulnerable.
Therefore, the first airline to fail will not necessarily be the one that consumes the most fuel, but the one with the least time to react and not enough money to hold on.
The Hour of Decisions
In the short term, airlines must protect their cash, adjust their fares to demand, and shrink capacity that no longer covers costs.
In the medium term, they must continue to refresh fleets and develop partnerships, despite financing and delivery constraints.
The question is no longer whether airlines will raise prices or cut programs. They will probably do both.
The remaining question is who will be willing to move first and who can afford to wait. In air transport, bankruptcies are rarely caused by a single event. But for some carriers, the surge in jet fuel could well be the last drop in the tank.
In the medium term, they must continue to refresh fleets and develop partnerships, despite financing and delivery constraints.
The question is no longer whether airlines will raise prices or cut programs. They will probably do both.
The remaining question is who will be willing to move first and who can afford to wait. In air transport, bankruptcies are rarely caused by a single event. But for some carriers, the surge in jet fuel could well be the last drop in the tank.
A passionate entrepreneur and specialist in air transport, with more than three decades of experience, Eric Didier coordinated the launch of the Oneworld alliance before creating and developing Qatar Airways in France and on several European markets, where he held key leadership positions, ensuring the growth and success of the airline.
An expert in team management and in commercial strategies, alliances and distribution, he has worked with several major airlines, contributing to their international expansion.
He now leads the consulting firm TED Advisory Services.
An expert in team management and in commercial strategies, alliances and distribution, he has worked with several major airlines, contributing to their international expansion.
He now leads the consulting firm TED Advisory Services.
