Analysis from IBA, the aviation intelligence and advisory company, shows that jet fuel prices remain around 54% above pre-conflict levels (as of April 8), despite easing from a peak of US$114 per barrel on April 8, to approximately US$94 on April 9, following a temporary stabilisation in global markets.
IBA notes that this continued volatility is unevenly affecting airline cost bases and is driving secondary impacts across fleet planning and aircraft asset values.
In assessing the effect of higher fuel prices, IBA has factored in the proportion of Cost per Available Seat Kilometre (CASK) attributable to fuel across regions, alongside hedging strategies and local variations in jet fuel pricing.
Assuming fuel prices remain elevated over the next 12 months, IBA has applied indicative adjustments to its regional Earnings Before Interest and Taxes (EBIT) margin forecasts. Its analysis suggests that higher fuel costs could reduce global airline profitability, with 2026 EBIT margins expected to fall by 1.7 percentage points to 5.5%, compared with a pre-conflict base case of 7.2%.
The impact is expected to vary significantly by region. Airlines in Asia-Pacific are likely to see the largest decline, with EBIT margins forecast to drop by six percentage points. This reflects a greater reliance on long-haul operations, lower levels of fuel hedging and exposure to highly competitive international markets.
Airlines in the Middle East (-4.9 percentage points) show a similar pattern due to fuel-intensive long-haul hub models, while Africa (-5.1 percentage points) is affected by structural challenges such as older fleets, lower load factors and limited pricing power.
By contrast, the effect is expected to be more moderate in North America (-0.6 percentage points) and Europe (-0.5 percentage points), where hedging strategies, stronger domestic markets and greater pricing power help offset fuel cost pressures.
IBA also highlights that North American airlines remain the least exposed to jet fuel volatility, supported by domestic supply dynamics, with prices broadly tracking 100–110% of last year’s levels.
Asia-Pacific and Middle Eastern carriers are the most exposed, with fuel costs rising by around 60%, while Europe and Africa have seen increases of roughly 40%. Europe continues to benefit from high levels of hedging, with many major carriers more than 80% covered for 2026, although this protection is expected to unwind into 2027.
IBA cautions that, despite the recent easing, ongoing fuel price volatility will continue to influence airline profitability, with wider implications for capacity, network planning and fleet strategy.
