All eyes remain on geopolitical events in the Middle East as the airline industry across the globe feels the impact of higher fuel costs.
The oil price volatility seen since the start of the conflict around Iran at the end of February remains. While last week’s temporary ceasefire brought some relief, the barrel price of crude oil has jumped back over the $100 mark as the US warned it would begin a blockade of maritime traffic entering and exiting the Strait of Hormuz.
The impact of higher fuel costs is already evident.
US giant Delta Air Lines, the first airline to report first quarter financial results, last week flagged a 14% increase in fuel costs during the three months ending March. That contributed to a net loss of $289 million for the first quarter, compared with a $240 million profit a year earlier.
Chief executive Ed Bastian says the carrier will “meaningfully” reduce capacity growth until the fuel environment improves, targeted at less profitable off-peak flying such as red-eye flights. The SkyTeam carrier’s capacity will now be flat in the three months to June, though it still expects total revenue to grow “in the low teens” and
Bastian remains upbeat.
“While higher fuel is a current impact to earnings, I’m confident this environment ultimately reinforces Delta’s leadership and accelerates our long-term earnings power,” he says.
While carriers have raised fuel surcharges to help mitigate the higher costs, the impact on earnings and capacity plans will become clearer when further US and the first European carriers report first quarter earnings later this month.
European airports body ACI Europe meanwhile has written to the European Commission calling for the urgent monitoring of jet fuel availability and supply over the next six months amid the conflict. It warns that “systematic jet fuel shortage” will become a reality for the European Union if passage through the Strait of Hormuz does not resume in a significant and stable manner within the next three weeks.
Meanwhile, traffic figures from London Heathrow released this morning illustrate the temporary impact on travel patterns the disruption to parts of Gulf airspace has had on network flows.
Passengers on Middle East flights, the fourth biggest market segment for the London hub, were down more than half in March. However, that was more than offset by increased demand across other long-haul networks, notably a 31% rise on Asia-Pacific flights.
That helped Heathrow’s overall passengers climb almost 7% over March 2025. Though, as with the rest of the industry it seems, Heathrow Airport chief executive Thomas Woldbye flags the outlook for the next few months “remains uncertain”.
Meantime airlines and airports in Europe are braced for potential operational disruption from the full implementation of the European Commission’s new Schengen Entry Exit System (EES) on 10 April, requiring mandatory registration of all third-country nationals. European airline and airport bodies have been warning of
lengthy queues because of challenges in the rollout timeline for the system.
The post Week 15 2026: Airlines eye fuel cost developments first appeared on FlightGlobal.