Aeroflot Holds the Line on Prices While the World Cuts Flights: Why Russia Is Dodging the Aviation Collapse

+7% Against Global Figures: Different Math

Alexandrovsky's statement about maintaining airfare prices sounds extremely well-reasoned: the company operates within inflation corridors and has no intention of passing fuel costs onto ticket prices. To understand just how significant this statement is, we need to look at the baseline from which Russian carriers and their foreign competitors are calculating costs.

For the Aeroflot Group (which includes Aeroflot itself, Rossiya, and Pobeda), jet fuel expenses since the beginning of 2026 have increased by 7% year-over-year. And this despite the fact that fuel is one of the main cost components of any flight: according to estimates from the International Air Transport Association (IATA), jet fuel accounts for 25% to 33% of ticket costs. The group's expenses for international flights have more than doubled, but it's the domestic market that generates the main passenger flow, and it has barely noticed any increase.

The global market is living in a different reality. The average price of jet fuel in April broke through $200 per barrel, pulled back to around $116 by June, but IATA's annual forecast still holds at $152 per barrel—nearly 70% higher than last year's levels. Russia's "seven percent aviation inflation" and global figures diverge by multiples, and this gap is the story behind the entire situation.

Hormuz Shut Down the Middle East—And Europe and Asia Were Left Without Fuel

The cause of the global shock isn't abstract "geopolitics," but a specific point on the map. On February 28, following U.S. and Israeli strikes on Iran, Tehran effectively closed the Strait of Hormuz—a narrow passage in the Persian Gulf through which roughly one-fifth of global oil trade and a significant share of jet fuel exports flow. Europe was hit hardest: before the war, the Middle East supplied up to 75% of European jet fuel imports, and with the closure of the strait, these supplies were wiped out.

Then the arithmetic of scarcity kicked in. In Europe, the kerosene premium over crude oil reached $121 per barrel—four times the normal level of around $30. The fuel itself cost nearly twice as much as the crude oil from which it's refined. Over the course of a year, kerosene in Europe rose in price by more than double, to $187 per barrel by early May. In North America, the increase was more modest at around 95%, but even there it fed into airfares.

Asia found itself in the most vulnerable position. The region was the largest buyer of Middle Eastern fuel, and most countries lacked their own reserves to ride out the shortage. In Singapore, the region's key fuel hub, kerosene jumped by 140% in the week after the war began, to $230 per barrel. Less wealthy, import-dependent markets in South and Southeast Asia (Vietnam, Pakistan, Myanmar) felt the blow earlier and harder, especially since China and Thailand held back their own exports to protect domestic demand.

Flights slashed, budget carriers go bust: who paid the price for jet fuel

When fuel accounts for up to a third of operating costs, and the average net profit margin for global airlines stands at around 2% according to IATA estimates, any price spike becomes a matter of survival. Carriers responded the only way they could—by cutting routes that were no longer profitable. In May schedules alone, airlines worldwide removed roughly 13,000 flights and 2 million seats, with Germany's Lufthansa and Turkish Airlines making the deepest cuts. The summer picture is even grimmer: from June through September, 9.3 million seats were pulled from the eleven largest markets, with Lufthansa alone axing 20,000 short-haul flights through October.

The weakest players were simply wiped out. In May, American budget carrier Spirit Airlines filed for bankruptcy: the ultra-low-cost business model couldn't withstand the fuel shock, since its entire economics depend on razor-thin margins. Spirit's exit isn't just one less competitor. Cheap seats disappeared from the market, meaning remaining carriers have less reason to keep prices low.

By late June, fuel prices had fallen—crude dropped roughly 20% over the month, and jet fuel in the U.S. retreated from its April peak of $4.88 per gallon to nearly $2.90. But ticket prices haven't followed: airlines aren't expecting a quick recovery in fuel costs and are keeping fares flat through September. Surcharges are being removed selectively for now, mostly by Asian, Middle Eastern, and European carriers—Hong Kong's Cathay Pacific is cutting its fuel surcharge by nearly 13% starting in July, while Malaysian budget carrier AirAsia X has reduced fares by 5%. Major U.S. airlines are holding prices steady. The industry has paid a steep price: IATA has slashed net profit forecast for 2026 down to $23 billion, $18 billion below the previous estimate, while profit per passenger drops from $9.10 to $4.50.

Ticket prices have risen where there's no domestic production

Behind the corporate losses lies a very specific bill for passengers. In the U.S., the average domestic fare in May was 18% higher higher than last year's, with economy class rising more sharply than premium—by more than 20%. According to flight search service Kayak, the average domestic airfare in just three months increased from $333 to $384. For summer, analysts forecast another 15% increase on domestic routes and 12% on international ones. In Europe, the surge is even steeper: even the cheapest economy tickets over the year rose by 24%—the highest in five years.

Passenger behavior itself has also changed. The booking window has compressed: people have stopped buying tickets a month or month-and-a-half in advance and wait until the last minute hoping for a discount, which disrupts airlines' planning. Some demand has shifted from air travel to trains. And where base fares couldn't be raised, fuel surcharges were added, even as separate fees on already-purchased tickets.

Against this backdrop, the Russian picture looks notably calm. Aeroflot in the first quarter carried 11.9 million passengers—up 2.2% year-over-year. The group posted a loss (adjusted minus 7.9 billion rubles under RAS for the quarter), but that's a matter of the company's financial results, not flight accessibility for passengers. The gap is visible in fares as well: international flights for Russians over the year rose by an average of 20%—roughly in line with everyone else, while domestic routes are forecast to grow by just 5–7%, within the inflation corridor. It's precisely the most important domestic segment that's been protected.

Why Russia Has Leverage Its Neighbors Don't

The difference comes down to structure and domestic production capacity. Europe and Asia are fuel importers dependent on external supplies, with Arab countries serving as the key supplier and Hormuz as the main channel. Russia, by contrast, is a producer, and its domestic market runs on its own fuel, not Middle Eastern kerosene. When global prices shot up, Russia had tools at its disposal that importers simply don't have. Even temporary shutdowns at refineries can't create critical problems here, because authorities have other methods of regulating the market.

The main one is protectionist. Starting June 1, the government banned aviation kerosene exports through November 30, redirecting fuel from foreign markets to the domestic one. The logic is straightforward: while kerosene prices are rising abroad, it's more profitable not to ship it for export but to supply domestic airports. Authorities claim there are sufficient reserves, and Aeroflot itself says it hasn't observed any fuel shortages across its route network. Import-dependent Europe, where stockpiles by June were approaching the critical threshold of IATA's 23-day supply, simply doesn't have access to this kind of lever: you can't redirect to your domestic market flows of something you don't have.

A Crisis That's Someone Else's Problem

Hormuz was formally reopened toward the end of June, but cautiously and with caveats. The sixty-day ceasefire could collapse at any moment—on June 20, Iran again threatened to close the strait—and cheaper oil still isn't translating into cheaper tickets. IATA directly warns that even with the strait open, restoring kerosene supplies will take months, because the bottleneck now isn't tankers but damaged refineries across the Middle East. The UAE estimates that full flows through the strait won't return before 2027.

While the world tallies its losses, Russia has found itself among those who, despite the Hormuz crisis and the fallout from the conflict in Ukraine, remain in a stable position. Aeroflot's promise not to raise ticket prices is not a gesture of goodwill, but rather a consequence of the same arithmetic: when fuel prices rise globally, it's always easier to "protect your domestic market" with internal resources.