The strength of the US dollar is putting new pressure on airlines’ fragile balance sheets, driving up the cost of everything from the fuel used to power their planes to the aircraft themselves.

A wave of dollar strength has sent currencies from the pound to the yen tumbling this year, and the US dollar index, which tracks the currency against its major peers, has recently traded close to 20-year highs.

This represents a particular challenge for international airlines recovering from the pandemic, as they raise revenue in local currencies but pay much of their costs in dollars.

“A strong dollar is a real challenge for the airline industry generally, as if we didn’t have enough challenges already, with Covid, Ukraine and the price of oil,” said Ryanair chief executive Michael O’Leary.

It means airline passengers may be hit further as the carriers try to pass on increasing costs to travellers through ticket prices, which have already soared after two years of border restrictions.

Flights for the autumn half-term break in the UK next month are 42 per cent more expensive than those in 2019, according to figures from consumer group Which?

Although most airlines have currency hedges in place helping to offset the worst of the impact, the soaring costs leave many airline bosses with difficult calculations on how many planes to fly this winter as the global industry reels from vast losses.

It is forecast to lose $10bn this year, bringing net losses over the past three years to $190bn, says the International Air Transport Association, the airline industry body. Only US airlines are forecast to turn a profit this year as a region.

“The strong dollar will definitely have an effect on the profitability of airlines . . . I think it is going to be a tough winter, for sure,” said David Yu, an aviation financing adviser and professor of finance at New York University Shanghai.

Typical operating costs paid in dollars include jet fuel, maintenance and overhauling aircraft, which together add up to about 40 per cent of airlines’ outgoings, according to Iata.

On top of this, airlines’ capital expenditure is also dollar denominated. They pay in the US currency when they buy their aircraft, even from European aviation giant Airbus. In addition, companies that choose to lease their planes rather than buy them pay in dollars.

“The US dollar is the currency of aviation, for better or for worse,” said Chris Tarry, of Ctaira, an aviation consultancy.

The growing pressures prompted three bosses this week to criticise the UK government for its economic policies that have sent the pound tumbling to a record low against the dollar.

Shai Weiss, the chief executive of Virgin Atlantic, which has about 60 per cent of its costs in dollars, said the government should consider “reversing course” on the fiscal policies that spooked markets, while Ryanair’s O’Leary was typically forthright as he branded the Liz Truss government “nuts”.

Willie Walsh, the former head of British Airways who now runs Iata, said the UK’s decisions would have a “massive impact on companies”.

However, the rise of the dollar is being felt across the world, as it has strengthened against nearly every G20 currency this year.

In India, the rupee has depreciated by 9 per cent, leaving airlines facing a “significant hit,” according to Vinod Kannan, chief executive of Vistara, India’s second-largest airline.

He said his airline’s costs have risen 15-20 per cent this year, when factoring in currency movements.

“It has been tough, the rupee has depreciated and I have not been able to pass that all on directly to the consumer. So while the revenue side of the house is doing extremely well . . . the cost has also been significant, so that has put pressure on us from a P&L perspective,” he said.

The problems are exacerbated by airlines facing an unusual combination of simultaneous rises in inflation, fuel and the dollar.

In particular, the inflationary environment has combined with the strong dollar to push up the price airlines pay for new aircraft, often on order agreed years in advance.

Airlines and manufacturers including Boeing and Airbus typically agree contracts that include so-called “escalation clauses” that increase the price of planes between order and delivery, based on factors including the price of raw materials, inflation and exchange rates.

Industry executives say these contracts include limits to stop prices spiralling out of control, but prices can still rise significantly.

“A lot of these contracts were done five years ago . . . and they are getting escalated,” said Yu, of New York University Shanghai. “Some were pushed back for a while as airlines did not want to take aircraft [during the pandemic] . . . the end purchase price might be much more than you expected.”

Virgin Atlantic’s Weiss said his airline had taken out protection against a fall in sterling “months ago”, while O’Leary said Ryanair was hedged until 2026 at €1.24 to the dollar.

But airlines still face a tricky balancing act as they try to manage their pricing and flying schedules in the face of weakening consumer confidence.

Iata’s Walsh said the volatility of jet fuel prices, which have not fallen in line with Brent crude since the summer, combined with the foreign exchange turmoil makes it “much more challenging” for CEOs.

“I spent more than 20 years as an airline CEO and I have never been able to figure out what’s the best exchange rate between sterling and the dollar, or euro and the dollar,” he said.

Additional reporting by Sylvia Pfeifer in London