The global airline fuel cost bill is on course to rise from $252 billion in 2025 to $350 billion in 2026, according to the International Air Transport Association — an increase of close to 40 per cent that is already showing up on tickets as carrier-imposed surcharges.
What follows
- The numbers behind the fare rises
- The crack spread problem
- How it reaches your ticket
- Airlines are still profitable
- The variable nobody controls
The numbers behind the fare rises
IATA’s mid-year assessment, published in its June release on industry profitability, put jet fuel at an expected average of $152 a barrel for 2026, up almost 70 per cent on the $90 average of 2025. The underlying crude assumption was Brent at $95 a barrel for the year, up 37 per cent from $69 in 2025.
Because fuel sits at roughly 29 per cent of global airline operating expenses — a share IATA expects to reach 31.4 per cent in 2026 — a move of that size cannot be absorbed in margins. Passenger ticket revenue is forecast at $839 billion in 2026, up 9.2 per cent on $768 billion in 2025, and a good part of that increase is fuel pass-through rather than growth.
These are an industry association’s own projections, and IATA has an interest in framing cost pressure sympathetically. The direction, though, is corroborated by its own jet fuel monitor and by carrier disclosures.
The crack spread problem
Crude is only half the story. The crack spread — the premium refined jet fuel commands over Brent — is expected to average $57 a barrel in 2026, which IATA describes as a historic high.
That matters because hedging programmes are usually built around crude, not the refined product. An airline that hedged Brent well can still be badly exposed if refining margins blow out, which is what a record crack spread means. It also means fares do not fall as fast as crude does when the oil price retreats, because the refining premium is slower to normalise.
How it reaches your ticket
Passengers rarely see a line item called fuel. They see YQ or YR codes, grouped on the fare breakdown under “taxes, fees and carrier-imposed surcharges”. The grouping is misleading: those two codes are set by the airline, not by any government or regulator.
On long-haul premium itineraries the amounts are substantial. On a round trip between London and New York in a premium cabin, carrier-imposed surcharges alone can exceed $700. The effect is sharpest on award bookings, where surcharges are typically payable in cash — so a redemption that cost a fixed number of points last year now carries a much larger cash component.
Two practical checks help. Compare the total, not the headline fare, when the same route is offered by carriers in different jurisdictions, since surcharge practice varies. And on award tickets, price the same route on a partner airline before booking, because surcharge policy differs between partners on identical metal.
Airlines are still profitable
The industry is not in distress. IATA forecasts net profit of $23.0 billion for 2026 — roughly half the previous year’s figure — on operating expenses of $1.117 trillion, with expense growth of 13 per cent outrunning revenue growth.
Halving a margin is painful, and it changes behaviour: thinner routes get cut, frequencies fall on marginal city pairs, and older, less efficient aircraft come out of service faster. Passengers feel that as reduced choice before they feel it as higher headline fares.
The variable nobody controls
Every figure above rests on the crude assumption, and crude has run ahead of it. Brent has traded above $100 a barrel since supply disruption in the Middle East, with the shutdown of a major Saudi export line adding to the pressure — see our reports on the East-West pipeline outage and the resulting price shock across Asia.
If Brent holds above the $95 assumption for the rest of the year, IATA’s profit forecast is optimistic and surcharges have further to run. If the disruption eases, crude falls before the crack spread does, so relief on tickets will lag relief at the pump. Either way, the near-term direction for fares on long-haul routes is up. Operational strain is compounding it, as our coverage of UK airport disruption this month shows.
Questions about fares and surcharges
How much are airline fuel costs rising in 2026?
IATA projects the industry fuel bill rising from $252 billion in 2025 to $350 billion in 2026, an increase of close to 40 per cent.
What is the crack spread and why does it matter?
It is the premium jet fuel commands over crude. IATA expects it to average $57 a barrel in 2026, which it describes as a historic high, meaning airlines pay more than the crude price alone would imply.
What are YQ and YR on a ticket?
They are carrier-imposed surcharge codes shown under taxes, fees and carrier-imposed surcharges. The airline sets the amount, not a government or regulator.
Are airlines losing money?
No. IATA forecasts industry net profit of $23.0 billion in 2026, roughly half the previous year’s level, on operating expenses of $1.117 trillion.
Do surcharges affect points bookings?
Yes. Carrier-imposed surcharges are generally payable in cash even on award tickets, which is why redemption values fall when surcharges rise.
Will fares keep climbing?
That depends on crude. IATA’s forecast assumed Brent averaging $95 a barrel for the year, and prices have traded above $100 since the Middle East supply disruption.
