Jet fuel hit $5.23 a gallon this week. Back in February, it was $2.50. That kind of swing does not just dent airline profits. It threatens to ground planes.
Across the industry, carriers from New York to Auckland are slashing schedules and bracing for something few executives have seen in their careers: a genuine fuel shortage.
"Nobody's telling me not to worry"
easyJet CEO Kenton Jarvis put it bluntly in an investor call on Friday. "I'm confident for a week or two. Probably good for three weeks," he said. "Nobody's telling me not to worry halfway into May."
He is not alone. Air France-KLM CEO Ben Smith told reporters the airline is "drawing up scenarios" for fuel shortages across its European hubs. SAS has already pulled roughly 1,000 flights from its April schedule.
In the United States, United Airlines CEO Scott Kirby warned that the carrier could lose as much as $11 billion this year if oil stays near current levels. United plans to cut 5% of flights in the second and third quarters. Delta logged a $400 million charge from rising fuel costs in its latest filing.
How the math breaks down
Fuel makes up 22% to 26% of a major airline's operating costs. When jet fuel doubles in a month, that ratio blows past 30%, eating into every other budget line.
Brent crude closed Friday at $112.57 a barrel, up 4.56% on the day. WTI settled at $99.64. Both benchmarks have climbed sharply since the Strait of Hormuz effectively shut to commercial tanker traffic on March 2.
The problem goes beyond price. With Middle Eastern refineries offline and Gulf shipping routes blocked, physical supply of jet fuel is thinning out. Europe has roughly one month of reserves. Southeast Asia, which depends heavily on Gulf-transported fuel, faces the tightest squeeze. Vietnam has already issued shortage warnings.
Fares are going up
Passengers will feel this soon. Industry analysts project domestic airfares rising 10% to 15% and international tickets climbing 15% to 25% if prices hold through summer.
Transatlantic fuel surcharges could jump to $45-$65 per ticket, up from $15-$25 before the crisis. On a long-haul flight burning 40-plus gallons per passenger, the economics leave airlines with little choice.
Most major US carriers stopped hedging fuel years ago, betting that lower average prices made the insurance premiums not worth paying. That bet looks painful right now.
The risk nobody talks about
Beyond the cost, there is a logistical nightmare brewing. If fuel runs short at overseas airports, airlines face the prospect of stranded aircraft. Planes stuck on foreign tarmacs with no way to refuel for the trip home.
Air New Zealand has already cut 5% of its schedule, affecting more than 40,000 passengers. The airline cited supply uncertainty in the Asia-Pacific region.
For now, flights are still running. But as gas prices squeeze American wallets and fuel reserves tick down, the window is narrowing. Mid-May is the line several executives are watching. If the Hormuz crisis drags past that point, grounded planes could become a reality.
The April 6 deadline President Trump set for Iran to reopen the strait takes on added urgency. For the airline industry, diplomacy is not just a geopolitical question anymore. It is a survival one.