European Airlines: Capacity trimmed again as fuel pressure remains relentless (Oct tracker)

Jet fuel remains the defining issue for European airlines. The Iran conflict has intensified since the June MoU expired in August, and with the Strait of Hormuz still largely closed to shipping, jet fuel has surged from the $900-1,000/MT range of the mid-summer truce to c. $1,600/MT. Forward curves are under extreme stress, with 2027 now around $1,200/MT, versus $800/MT at the first April peak. Hedges offer a cushion, but they are rapidly rolling off, and carriers are responding by cutting the exposure itself. Winter schedules are being trimmed again, with cuts once again falling heavier on short-haul. Yields are tracking above last year, with intercontinental beating intra-Europe, and tighter supply should keep fares supported. Long-haul growth in winter is around 3-7%. Two airlines stand out as best protected: Ryanair and IAG. By contrast, Air France-KLM and Wizz Air appear more exposed, with higher leverage and greater fuel-price sensitivity.