Ceasefire but no relief: Why airlines will continue to face high fuel costs
The fallout from the Iran war represents a broad shift, rather than a temporary disruption, for the aviation industry
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FOR the aviation sector, the oil shock from the Middle East conflict which started on Feb 28 has already spread through the system.
Fuel remains the largest single cost item for airlines, typically accounting for 20 to 35 per cent of total operating expenses. Even modest price movements can materially affect margins.
In the recent escalation, jet fuel prices rose sharply within weeks, sometimes more than doubling at their peak. Supply chains were disrupted, insurance premiums increased, and operational complexity rose due to airspace restrictions.
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