SINGAPORE/HONG KONG – US President Donald Trump’s two-week ceasefire with Iran is unlikely to provide immediate relief to the global aviation industry as it reels from its worst crisis in years, executives said on April 8, even as airline shares rallied after the deal.

International Air Transport Association (IATA) director general Willie Walsh warned it would take months for jet fuel supply to recover even if Iran reopened the Strait of Hormuz, given disruptions to Middle East refining capacity.

Delta Air Lines forecast lower-than-expected profit for the second quarter and said it would cut capacity across the board to make up for the US$2 billion (S$2.54 billion) in extra fuel costs it expects to book in the second quarter.

Fuel is the second-largest expense for airlines after labour, typically accounting for about 27 per cent of operating expenses.

Iran’s closure of the Strait of Hormuz has choked supplies of jet fuel globally, and news of a ceasefire and the possibility of safe passage through the Strait sent airline stocks soaring.

Oil fell below US$100 per barrel after Mr Trump said he had agreed to a two-week ceasefire with Iran, subject to the Strait’s immediate and safe reopening.

But comments from executives and experts across the industry highlight deepening pain for airlines facing a doubling of jet fuel prices and worries about constrained supplies.

Carriers across the world have been hiking fares, cutting flights, carrying extra fuel from home airports and adding refuelling stops as the Middle East conflict squeezes supply...