Elevated jet fuel prices, roughly doubled since the Iran conflict began in February 2026, represent the dominant driver pressuring airline balance sheets and elevating near-term bankruptcy odds for weaker carriers. Ultra-low-cost operators with limited pricing power and high fixed costs have absorbed the brunt, as seen in Spirit Airlines’ May 2026 liquidation after its second Chapter 11 filing and airBaltic’s September Chapter 11 filing amid $583 million in funded debt plus payroll obligations. JetBlue’s TrueBlue-backed bonds trading at 72 cents on the dollar imply yields near 19%, signaling acute refinancing risk ahead of 2026–2027 maturities, while Volotea entered preliminary Spanish insolvency proceedings in September. Stronger network carriers with scale, diversified revenue, and hedging flexibility face narrower impacts, though sustained fuel costs above recent levels and upcoming debt rollovers could widen distress if demand softens or capacity cuts prove insufficient. Market-implied probabilities reflect these cash-burn dynamics and limited liquidity buffers through year-end.