The war between the United States and Iran , and the consequent closure of the Strait of Hormuz , is impacting costs in the aviation sector. The four major American airlines — American Airlines, United, Delta, and Southwest — are expected to face an extra cost of US$11 billion in 2026 due to the impact on aviation fuel prices.
The price in the United States has risen almost 60% since the strait was closed at the end of February, reaching US$3.95 per gallon at the end of last week, according to the Argus US Jet Fuel Index, which measures daily spot prices in major American aviation hubs.
The price fell to $3.40 per gallon on Tuesday, March 10, but the U.S. government raised its official forecast for the average price of jet fuel this year to $2.67 per gallon, a 37% increase compared to last month's projections.
Fuel is among the highest costs for airlines, representing about 25% of expenses in normal periods.
Due to the conflict in the Middle East, companies will face additional fuel costs of US$280 million for each week that global prices remain at current levels.
“There is enormous uncertainty about where and when fuel prices will peak and for how long they will remain high,” Andrew Lobbenberg, an airline analyst at the British bank Barclays, told the Financial Times .
Last week, United Airlines CEO Scott Kirby warned that the increases would also have a "significant" effect on the airline's first-quarter results and that the impact on ticket prices would "likely begin quickly."
American Airlines recently reported that "a one-cent-per-gallon increase in jet fuel prices would increase our annual fuel expenses in 2026 by approximately $50 million," which equates to more than $1 billion in extra fuel costs per quarter, based on current levels.
The company was more exposed than its main competitors due to its weaker financial situation, according to an assessment by Sheila Kahyaoglu, an analyst at the American investment bank Jefferies.
American low-cost airlines, such as Frontier and Spirit, had more price-sensitive customers and were likely more vulnerable to price increases than the major companies in the sector, which had a higher proportion of premium and international passengers, according to analysts.
“Most U.S. airlines lack currency hedging, making them more vulnerable to a sudden increase in fuel prices in the short term,” said Raman Singla, director at Fitch Ratings.
The international risk agency stated that, in Europe, airBaltic was the most exposed airline in the region, with only 6% of its fuel hedged for the next three months, while Turkish Airlines had only 36% hedged for this year.
Wizz Air, Ryanair, and Lufthansa have hedged over 80% of their purchases for the next quarter, while British Airways and Air France are also heavily hedged.
Although European airlines typically hedge their jet fuel costs, American Airlines, Delta, and United abandoned this practice a decade ago, arguing that the long-term costs outweighed any short-term benefits in the event of a sudden price increase.
The four American airlines declined to comment on their exposure to high jet fuel prices.
A source connected to the US aviation industry, however, said that "while people remember the savings airlines make with hedging operations when prices go up, they tend not to notice the downturns, during which companies lose a lot of money."
Dan Akins, an aviation specialist at Flightpath Economics, states that if there had been any indication of this geopolitical scenario, they probably would have hedged this year. "But if they had adopted this practice over the last 10 or 15 years to save money today, it wouldn't have been worth it."
This is not the first major impact that major aviation companies have felt on their costs in 2026. In January, the heavy snowstorm that hit at least 20 American states affected company revenues due to the disruption of the country's main airports.
American Airlines alone estimated that the winter storm could cause losses of up to US$200 million, which will be reported in its first-quarter earnings report.
