Your next flight doesn't have to be so expensive. Here's why

Rising jet fuel prices, exacerbated by geopolitical instability in the Middle East and the closure of the Strait of Hormuz, have doubled airline costs within a month, forcing carriers to choose between hiking airfares or employing financial hedging. While international carriers like Qantas and Lufthansa still use fuel hedging—a strategy using futures contracts to lock in prices—major U.S. airlines like United, American, and Delta abandoned the practice a decade ago. Former United CFO Jerry Laderman and economist Kerry Tan explain that U.S. carriers found Wall Street transaction fees too costly and discovered that passing expenses directly to less price-sensitive consumers was a more stable financial model. Although Southwest Airlines historically saved billions through aggressive hedging, even they recently ceased the practice due to high premiums. Currently, U.S. airlines rely on fuel surcharges and energy-efficient operations, though a prolonged conflict may force a return to complex financial insurance strategies.