Rising jet fuel prices leave TAP more exposed than larger European rivals

Jet fuel prices have surged 76% since mid-June, increasing pressure on TAP at a time when the Portuguese airline remains less protected against fuel price swings than its main European peers.

According to data from Platts, TAP had hedged 50% of its fuel needs, up from 40% at the start of the year but still below the levels of major European airlines. Financial analyst Nuno Esteves told ECO that this lower protection leaves the airline more exposed if prices stay high or rise further, increasing pressure on fuel costs and operating profitability.

The impact was already visible in the second quarter. TAP’s fuel bill rose 52.4% to €370.2 million, equal to 48% of total costs, helping drive an operating loss of €47.6 million between April and June. TAP said in its half-year results that sharp changes in jet fuel prices after June 30, 2026 could have a significant effect on the group’s results, particularly if linked to geopolitical conflicts such as the one in the Middle East.

The airline said its hedging strategy reduced fuel spending by €106.3 million in the first six months of 2026, excluding the cost of taking out that protection. TAP also said it has been assessing and implementing fare adjustments for tickets issued from March 2026, where market and demand conditions allow, to pass on the expected increase in fuel costs.

Originally published at Eco.pt