The Middle East impact and airline hedging strategies
The conflict in the Middle East has resulted in what the International Energy Agency (IEA) describes as the largest disruption in the history of the global oil market as the amount of crude oil and other refined products passing through the crucial Strait of Hormuz falling from around 20 million barrels per day to a trickle. The implications for airline’s input costs are stark with jet fuel prices jumping and leaving airlines around the globe, and especially those who do not hedge their fuel, facing increased margin pressures while travel disruption across the region will also hit unit costs at affected carriers.

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Vol. 16 Issue 7 of Aviation Finance