Jet fuel prices spiked sharply in 2026 following Middle East conflict escalation, with the Argus U.S. Jet Fuel Index reaching nearly $4.88 per gallon by early April before moderating, adding billions in industry costs that ultra-low-cost and smaller carriers struggled to absorb. This pressure contributed to airBaltic’s September 14 Chapter 11 filing in New York court and Volotea’s late-September insolvency filing in Europe, both citing engine issues, pandemic legacy debt, and fuel-driven liquidity shortfalls. Spirit Airlines completed liquidation earlier in the year after its second filing. Trader sentiment reflects elevated near-term risk for other European regionals and U.S. carriers with CCC-rated debt and 2026 maturities, though major network airlines retain stronger balance sheets and pricing power. Key catalysts through year-end include further fuel volatility, lessor negotiations, and any additional regulatory or government support announcements.