A two-week ceasefire between the United States and Iran, brokered by Pakistan and announced on April 8, has offered a tentative pause to 40 days of conflict that have inflicted severe disruption on global aviation.
However, industry leaders and analysts are warning low-cost and regional carriers not to mistake a ceasefire for a recovery, particularly regarding fuel costs.
For the sector, the underlying numbers accumulated since 28 February tell a sobering story, whatever the diplomatic outcome. Tens of thousands of flights to and from the Middle East have been cancelled, according to aviation analytics firm Cirium. Jet A-1 prices more than doubled during the conflict, significantly outpacing a roughly 50% rise in crude oil prices. The International Air Transport Association (IATA) put the global average at $209 per barrel for the week ending 3 April, up 132% year-on-year.
Willie Walsh, IATA’s director general, speaking at the Association’s World Data Symposium in Singapore this week, was unambiguous about the outlook.
“If [the Strait of Hormuz] were to reopen and remain open, I think it will still take a period of months to get back to where supply needs to be, given the disruption to the refining capacity in the Middle East,” he said.
Walsh compared the scale of disruption to the aftermath of 9/11, when the industry took about 4 months to recover, and cautioned that even a prompt reopening of the Strait would not immediately resolve the damage to the region’s refineries. Drone strikes have driven the crack spread (the price difference between a barrel of crude oil and the petroleum products refined from it) for Jet A-1 to record levels.
Meanwhile, the crisis has revealed sharply differing levels of preparedness across the low-cost sector.
Ryanair, which has 80% of its 2026–27 fuel locked in at $67 per barrel, is among the best-insulated carriers in Europe, though CEO Michael O’Leary told the Financial Times in late March that the airline would not be adding new hedges for at least three months, preferring to wait for prices to fall.
EasyJet hedged 84% of its first-half Jet A-1 needs at $715 per metric tonne, but that cover drops to 62% in the second half of the year. CEO Kenton Jarvis has already signalled that passengers should expect higher fares once those deals end.
Wizz Air is in a more exposed position, having warned of a projected €50 million profit hit, and its shares have fallen sharply since the conflict began.
AirBaltic’s reported hedging level is lower than that of its peers, though the exact figure remains to be confirmed.
The hedging differential may translate into competitive dynamics on thin routes and some commentators have suggested that carriers with stronger hedging positions could use the crisis to pile pressure on rivals.
On the network side, Wizz Air and easyJet are already reported to be planning around 5% less capacity on some routes in May and June.
For smaller regional operators, without the hedging muscle or balance-sheet depth of the major LCCs, the options are more limited still. Carriers whose fuel spend accounts for a large share of operating costs and whose net margins are already projected at just 2.3% for 2026, will face real difficulties.
If the ceasefire holds, Walsh is optimistic that the region will bounce back “I fully expect the Gulf hubs to recover and recover quickly,” he said.
The question for the low-cost and regional sector is whether the structural damage to fuel supply chains, insurance markets, and route economics will prove to be long-term problems
Further talks between US and Iranian delegations are scheduled to continue in Islamabad this weekend.
All figures correct at time of publication. Cirium flight cancellation data, IATA fuel price data and hedging figures sourced from published corporate disclosures and analyst reports.
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