Cathay Pacific has announced an increase in its fuel surcharge structure, reflecting the sharp rise in jet fuel prices linked to ongoing geopolitical tensions in the Middle East.
According to data from the International Air Transport Association (IATA), the global average price of jet fuel climbed to $197 per barrel in the week ending 20 March 2026, up from $157.41 two weeks earlier and $95.95 a month before.
The increase has been driven by both components of jet fuel pricing. Crude oil rose to $110.78 per barrel, while refining margins surged to $86.22 per barrel, highlighting the scale of cost escalation across the supply chain.
Fuel accounted for around 30% of Cathay Pacific’s total operating costs in 2025, making it one of the airline’s most critical cost drivers.
While Cathay uses fuel hedging strategies to manage volatility, its current hedging coverage extends to only around 30% of the crude oil component and does not apply to refining costs. As a result, the airline said hedging alone is insufficient to offset the current surge.
In response, Cathay will adjust its fuel surcharges from 1 April 2026. Short-haul flights will increase to HK$389, medium-haul to HK$725 and long-haul to HK$1,560.
The airline noted that fuel surcharges remain a key mechanism for recovering part of the additional cost burden and that similar adjustments are being implemented across the industry.
