Brent crude oscillated between approximately 78 and 92 USD per barrel during 2024, settling in early 2025 in the 82-85 USD range. Jet fuel cracking spread over Brent typically clears 15-22 USD per barrel reflecting refining margin tightness during peak driving season. IATA’s January 2025 Outlook projected 2025 jet fuel around 84 USD per barrel against the 2024 average of approximately 87 USD, with EU emissions allowance costs on European-cleared fuel adding 0.7-1.2 EUR per litre.
Carrier Hedging Strategies
Lufthansa Group reported hedging a substantial portion of its 2025 fuel consumption at attractive forward prices during 2024, building a layered hedge profile across the forward curve. Air France-KLM held a comparable hedge ratio entering 2025. BA Holdings’ typically lower hedging discipline reflects the more volatile parent IAG approach. Asian carriers tend toward lower hedge ratios; JAL and ANA Holdings have historically retained more upside exposure to retain upside on price declines.
Cost Pass-Through Mechanisms
Fuel surcharges on international tickets adjust quarterly at most European carriers, with the BA YQ component on LHR-HND typically clearing 200-280 GBP per leg in recent periods. EU 1107/2006 requires upfront fuel surcharge transparency on the booking flow’s all-in price display. Carrier mathematics typically pass 60-70% of incremental fuel cost into ticket pricing, retaining 30-40% as load-factor risk absorbed by margin compression.
Sustainable Aviation Fuel Premium
SAF blends at 2% under RefuelEU Aviation add approximately 1.2-1.5% to the all-in fuel cost on European departures. The cost impact translates to roughly 8-12 EUR per economy passenger on a Frankfurt-Tokyo rotation. Carriers including Lufthansa offer voluntary higher-blend Green Fares at around 19 EUR per economy passenger and 90 EUR business class, with the blended SAF additionality verified through ISCC EU certification chains traceable to Neste’s Porvoo refinery production.