Airlines face fuel price uncertainty and reduced hedging

The Airline Association (ALA) has warned of significant financial risks for airlines due to a sharp decline in fuel price hedging. While major groups currently maintain coverage of 60% to 80% for the winter season, this is expected to drop to between 15% and 40% for the next summer season, leaving companies highly exposed to price fluctuations.

Javier Gándara, president of ALA, noted that kerosene represents approximately 30% of airline costs. The industry is facing pressure from rising kerosene prices, which have doubled compared to crude oil, and an increasing 'crack spread.' Additionally, the rising costs of emission rights and Sustainable Aviation Fuel (SAF) present further financial challenges.

Despite this uncertainty, the winter season in Spain is projected to see 145.6 million seats, a 5.5% increase compared to the previous year. Regional growth is expected in Andalusia and the Balearic Islands, while Madrid-Barajas airport anticipates a 10% increase in capacity. However, airlines may need to adjust schedules or pass increased costs to passengers depending on supply and demand.