Abu Dhabi: Etihad Airways chief Antonoaldo Neves has identified rising jet fuel costs as the biggest challenge facing airlines in 2027, warning that airfares could come under pressure from the second quarter as industry fuel hedging positions begin to run down.
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With fuel accounting for a substantial share of airline operating expenses, 35-40 per cent according to rough estimates from Neves, carriers may have limited room to absorb higher costs indefinitely, particularly as the protection offered by advance fuel purchases diminishes.
"Jet fuel right now is about all in $150 a barrel of Brent," Neves told Gulf News. He was referring to the combined cost of the underlying oil benchmark and the refining premium, known in the industry as the crack spread.
He said many airlines had bought fuel in advance through hedging arrangements this year, but those positions were expected to be considerably lower from the second quarter of 2027.
"You've seen many CEOs of airlines saying, 'Look, if jet fuel doesn't come down, we may see prices going up, and that's going to happen,'" he said.
"Something's got to give, but we hope for that to go down, and we like low prices.
