A two-week ceasefire between the United States and Iran was announced on Wednesday. For an aviation industry that has spent six weeks absorbing the worst fuel crisis in its history, you might expect that to be good news. It is — but only partially, and the industry's response today tells you everything about how deeply this crisis has already embedded itself.
"Even two weeks is a positive because we will see some flow of oil return," said Willie Walsh, IATA's Director General, speaking to Bloomberg Television. Then came the qualification that matters: Jet fuel and ticket prices, he said, will remain elevated for some time regardless. That caveat is not diplomatic hedging. It reflects a structural reality that a fortnight of ceasefire cannot undo.
Delta Air Lines crystallised the problem in its first-quarter earnings release Wednesday. Revenue reached a March quarter record of $14.2bn — up 9.4% on the prior year. Earnings came in more than 40% higher than the same period last year. And yet CEO Ed Bastian declined to update his full-year profit forecast. "We're not updating it in light of the uncertainty," he said. "I think it'd be imprudent to make any estimate at this point." The reason: Delta expects its fuel bill to rise by more than $2bn in the second quarter alone, with an all-in fuel cost of approximately $4.30 per gallon forecast for the period. Record revenues, and still no visibility on the year. That is the paradox the aviation industry is living inside right now.
Bastian went further than the numbers. He said he expects elevated fuel prices to drive structural changes across the sector — that airlines would either improve, rationalise, consolidate, or face being eliminated. This crisis is different from previous shocks, he noted, because of the speed at which fuel prices have moved. He is right. The Argus US Jet Fuel Index has risen 85% in five weeks. Even an aviation industry accustomed to volatility has never absorbed a price movement at this velocity.
The supply picture, which is the more serious half of this story, is still deteriorating. Commodity analysts at Sparta put it plainly in their April trading outlook: "A global jet supply crunch is emerging with no clear relief mechanism." The Strait of Hormuz carries roughly 25 to 30% of the world's aviation fuel. That supply has not simply become expensive — it has largely disappeared from international markets. IEA Executive Director Fatih Birol has stated this week that jet fuel and diesel are the most stressed barrels in global markets. "We are seeing it already in Asia," he said, "but soon, in April or maybe beginning of May, it will come to Europe."
A ceasefire of two weeks helps, but as one aviation logistics expert noted, even if the Strait reopened unconditionally today, it would take months for oil and fuel markets to return to anything resembling normality. Production has been taken offline. Storage has run down. The physical hangover from six weeks of disruption does not dissolve in a fortnight.
The evidence of that is visible at airports right now. Italy has now extended its jet fuel rationing to seven airports — Brindisi, Pescara and Reggio Calabria joined the list on April 6, following Milan Linate, Venice, Treviso and Bologna. Air BP Italia has in some cases capped refuelling at 2,000 litres per aircraft for non-priority short-haul flights. Short-haul operators are bearing the hardest constraints, forced into fuel tankering, loading extra fuel at departure airports — which adds weight, reduces efficiency, and drives costs higher still. The UK remains acutely exposed. Ryanair's Michael O'Leary said this week: "Of all the European countries, the one that is most vulnerable is the UK because of the market share that the Kuwaitis have here." Guernsey-based carrier Aurigny has already cancelled flights from mid-April through early June.
The disruption to actual flying is intensifying. On a single day in early April, nearly 7% of all global flights — 7,049 of 104,618 scheduled routes — were cancelled, including 14.6% of all North American departures. That compares to 4.7% of global flights on the same day last year. Lufthansa is now preparing to ground approximately 40 aircraft — around 5% of its capacity — according to Bloomberg, as it develops crisis scenarios for varying degrees of fuel shortage. Batik Air Malaysia has slashed domestic operations by 36%, describing the cuts as a necessary response to the fuel crisis. WestJet in Canada launched a $60 fuel surcharge on bookings today.
The fare picture continues to worsen for passengers. Ticket prices for the most recent week of available OAG data were up 24% on the same week in 2025. On individual Asia-Europe routes, the increases are multiples of that. Vietnam Airlines has warned it could cut between 10 and 20% of its flights if jet fuel reaches $160 to $200 per barrel — a level it has already surpassed. The industry had forecast $41bn in profits for 2026 before the conflict. That forecast is in serious jeopardy regardless of what happens in the next two weeks.
There is one structural observation worth making clearly. Even the most hedged carriers in the world — Ryanair, Lufthansa, IAG — have hedging contracts that expire into summer. A two-week ceasefire does not lock in prices for June and July. The protection that has shielded European carriers from the worst of this shock is finite, and it runs out at precisely the moment demand peaks and passenger volumes are highest. When those hedges roll off, unhedged spot prices flow through to fares immediately.
A ceasefire, if it holds, matters. It creates the conditions for Hormuz to reopen, for tanker traffic to resume, for refineries to rebuild run rates, and for the physical supply of jet fuel to begin recovering. Walsh is right that it is positive. But the commodity analysts are also right that there is no quick relief mechanism. The market has been dislocated, inventories have been drawn down, and supply chains have been reconfigured around scarcity.
The author is an aviation analyst. X handle: @AlexInAir.
