Jet fuel a major risk factor for airlines

CAAT said jet fuel prices remain a key risk to the aviation sector, as fuel typically accounts for 25-40% of total airline operating costs.

The International Air Transport Association (IATA) had forecast average jet fuel prices of around US$88 per barrel in 2026, CAAT noted. However, with the Middle East situation worsening, jet fuel prices have risen sharply. CAAT said the global average jet fuel price in March 2026 stood at US$181.57 per barrel, reflecting extreme volatility and cost pressure—particularly as conflict zones overlap with key global energy transport routes.

CAAT added that the outlook remains highly uncertain due to external factors, including geopolitical risks, global supply-and-demand swings, and production and export policies by major oil producers—factors that could continue to push jet fuel costs higher and limit airlines’ ability to manage costs and set pricing strategies.

“If oil prices remain elevated, airlines may need to raise fares or impose additional fuel surcharges, which could directly affect travel demand,” the report said.

Thai airlines already cutting schedules

CAAT cited information from the Airlines Association of Thailand, which said airlines have absorbed severe cost impacts from higher jet fuel prices and tried to maintain services—even at a loss during the recent Songkran travel period—to reduce passenger disruption.

However, the association said carriers now have little choice but to reduce flights, while continuing to operate more than 60% of their planned schedule from before the crisis.