Mexico’s Top Airlines Report Up to 99% Jump in Q2 Jet Fuel Costs Following Middle East Price Spike
Mexico’s largest airlines reported second-quarter increases of up to 99% in jet fuel costs after geopolitical tensions in the Middle East sent fuel prices sharply higher earlier this year, although carriers were able to recover part of the increase through higher fares and network optimization.
Airlines faced sharply higher fuel costs after tensions involving Iran disrupted global energy markets, lifting jet fuel prices in the first quarter, according to Paulina Anciola, deputy director at Banamex Economic Studies.
“The upward pressure came from stronger demand, relatively inelastic supply and the conflict involving Iran and the U.S., including the closure of the Strait of Hormuz and the resulting increase in energy prices,” Anciola told OPIS.
Jet fuel prices surged in late February following escalating tensions involving Iran and remained well above historical levels through May before retreating in June.
OPIS data showed the average landed spot price for U.S. Gulf Coast jet fuel delivered to Mexico’s East Coast climbed 75% between Feb. 27 and March 5.
Monthly average prices reached a high of 19.595 pesos/liter in March before easing to 16.631 pesos/liter in May and 14.006 pesos/liter in June.
Although jet fuel prices moderated during May and June, second-quarter airline earnings reflected the lagged impact of fuel purchased during the March April price spike.
The higher fuel cost was reflected across second-quarter earnings reports released this month, with Mexican carriers Aeromexico, Volaris and Viva Aerobus each reporting roughly 70%-99% increases in fuel costs despite lower consumption volumes.
Volaris said it consumed 82.43 million gallons of jet fuel during the second quarter, down 2.9% from 84.9 million gallons a year earlier. Viva Aerobus posted a steeper decline, with fuel consumption falling 12.9% to 58.9 million gallons from 67.6 million gallons. Aeromexico, Mexico’s largest airline, bucked the trend, reporting a slight 0.2% increase in fuel consumption to 117.5 million gallons, compared with 117.3 million gallons in the second quarter of 2025.
Anciola added airlines could continue facing margin pressure if energy prices remain elevated, as fuel prices typically rise much faster during geopolitical shocks than they retreat once market conditions stabilize.
“When energy prices experience an upward shock, they tend to rise much faster than they later decline,” she said.
Aeromexico’s average fuel cost nearly doubled to $4.20/gal from $2.30/gal a year earlier, driving an 80% increase in total fuel expenses to $219.3 million, said the company.
The higher jet fuel prices reduced profits by about $30 million, executive director Andrés Conesa said in a call with investors. However, pricing adjustments and route optimization allowed the airline to recover roughly 75% of that impact. Fuel was the primary driver behind a 30.3% year-over-year increase in operating expenses.
Low-cost carrier Volaris reported that its average economic fuel cost rose 70% year over year to $4.18/gal, in what executive director Enrique Beltranena said was “one of the most challenging fuel environments in recent years.”
Volaris’ total fuel expense climbed to $347 million, and executives said the airline recovered about 28% of the additional fuel costs through fare increases.
“Fuel pricing recapture in the U.S.-Mexico market was about 86%, while in the domestic market it was lower because the domestic market follows a different dynamic,” Executive Vice President of Airline, Commercial and Operations Holger Blankenstein said during the company’s earnings call last week.
He said Volaris’ ultra-low-cost business model serves more price-sensitive travelers in Mexico, requiring the airline to calibrate fares more cautiously even if it means absorbing a larger share of the higher fuel costs.
Looking ahead, Volaris expects U.S. Gulf Coast jet fuel prices to average $3.20/gal in 2026, up from $2.12/gal in 2025, while forecasting prices will ease to about $3.50/gal during the third quarter.
Monterrey-based low-cost carrier Viva Aerobus reported Friday that second-quarter operating expenses rose 25.7% to $647 million, driven by a 99% surge in fuel costs as average prices climbed to $3.98/gal from $2.0/gal a year earlier.
“The second quarter was defined by an extraordinarily elevated fuel environment, reflecting the sustained impact of geopolitical disruptions that emerged during the end of the first quarter,” Chief Executive Officer Juan Carlos Zuazua said in the company’s second-quarter report.
Viva Aerobus said it had hedged 6.6% of its anticipated 2026 jet fuel consumption as of June 30, while also maintaining foreign exchange hedges to reduce exposure to fuel price and currency fluctuations.
–Reporting by José Luis Adriano, jadriano@opisnet.com; Editing by Karla Omaña, komana@opisnet.com and Michael Kelly, mkelly@opisnet.com