Asia-Pacific airlines face growing exposure to high jet fuel prices as older hedging contracts expire and carriers must decide whether to lock in new cover at higher levels, industry executives said, according to Reuters.

Jet fuel is trading at about $148 a barrel on the spot market, Reuters reported. That is down from nearly $180 at the end of October but well above the roughly $85 before the Iran war began in late February.

Wong Hong, director general of the Association of Asia Pacific Airlines (AAPA), said fuel now makes up about 33 percent of airlines’ operating costs.

The International Air Transport Association (IATA) put the share at 25 percent last year, before prices surged. Wong, whose group represents 18 regional carriers, called hedging a “very, very tricky dilemma”. He said airlines that had hedges in place over the past six to eight months had fared well but now faced re-hedging at higher prices.

Executives attending AAPA’s annual assembly in Kuala Lumpur this week disagreed on how long the pressure would last, Reuters said.

Ibrahim Canliel, CEO of Air Astana, said he sees a new normal in which fuel stays at roughly today’s levels, which he referred to as Brent oil at about $90 to $100 a barrel. He said the Kazakh carrier’s first-half hedges have expired and that current prices do not make sense for new cover.

The airline still plans to rebuild its position, aiming to hedge all fuel bought outside Kazakhstan, about 30 percent of its total in a typical year.

Ross Leggett, senior managing executive officer at Japan Airlines (JAL), told Reuters he expects fuel prices to remain cyclical. JAL is budgeting for a worst case of $160 a barrel, the average it paid from April to September, he said.

Juichi Hirasawa, CEO of All Nippon Airways (ANA), said fuel costs will exceed initial plans by 100 billion yen ($626 million) this fiscal year. He expects the market to stabilise in the second half of the financial year ending March 31.

Both Japanese carriers hedge only domestic fuel use and rely on fuel surcharges and fare changes to cover international exposure. Neither signalled a change to that approach, Reuters said.

Leggett said JAL will introduce a domestic fuel surcharge from April next year, a first for the airline, after concluding it could not rely on government fuel subsidies indefinitely. Hirasawa said ANA is considering a domestic surcharge but that competition from bullet trains makes the decision difficult.

Fares have risen with oil prices but not always enough to cover higher fuel costs, according to Reuters. “There has to be a breaking point where passengers will say no,” Wong said. He said Asia-Pacific passenger growth was negative in aggregate from April to August, with September “just above water,” and that capacity cuts were a potential risk.

Singapore Airlines shows how margins have narrowed even at carriers with large hedges, Reuters said. Its fuel bill rose 56 percent in the six months to September, reaching S$3.97 billion ($3.09 billion). That cut operating profit by 29 percent even as revenue reached a record.

The airline paid an average of $171 a barrel before hedging, an increase of 87 percent year on year. Hedging gains of S$731 million, against an S$75 million loss a year earlier, brought the effective price to $145 a barrel.

Chief Financial Officer JoAnn Tan told an earnings briefing on Thursday that hedging “only offers some level of protection”. She said no one can predict fuel prices, which is why the airline hedged.