* IATA chief Walsh says months before jet fuel supplies

recover

* Refinery damage may delay jet fuel supply recovery,

says Walsh

* Delta expects $2 bln extra costs from jet fuel in Q2

* Airline shares rally on ceasefire and Hormuz reopening

hopes

* TUI assessing how to get stranded cruise ships back

By Yi-Chin Lee, Julie Zhu and Alessandro Parodi

SINGAPORE/HONG KONG, April 8 (Reuters) - U.S. 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

Wednesday, even as airline shares rallied after the deal.

Willie Walsh, director general of the International Air

Transport Association (IATA), 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 ( DAL ) forecast lower-than-expected profit

for the second quarter and said it would cut capacity across the

board to make up for the $2 billion in extra fuel costs it

expects to book in the second quarter.

OIL PRICES DROP AFTER CEASEFIRE DEAL

Fuel is the second-largest expense for airlines after

labour, typically accounting for about 27% 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 $100 per barrel after 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

refueling stops as the Middle East conflict squeezes supply.

Walsh told reporters that while he expected crude oil prices

to fall, jet fuel costs were likely to remain slightly elevated

due to the impact on refineries.

"If it were to reopen and remain open, I think it will still

take a period of months to get back to where supply needs to be

given the disruption to the refining capacity in the Middle

East," Walsh said.

AIRLINE SHARES SURGE, BUT TOURISM RECOVERY WILL TAKE TIME

Jet fuel prices normally move in tandem with oil prices, but

they have more than doubled since the Iran conflict, far

outpacing a 50% rise in crude prices prior to the two-week

ceasefire.

That has inflated costs, disrupted schedules, prompted

airlines to cut routes and pushed the limits of what travelers

will pay.

On Wednesday, Delta said it expects to pay about $4.30 a

gallon for jet fuel in the June quarter, adding more than $2

billion to the price a year earlier.

Even so, global airline and travel stocks rose. Australia's

Qantas Airways ( QUBSF ) jumped more than 9%, Air New Zealand ( ANZFF )

rose over 4%, Hong Kong's Cathay Pacific

climbed 5% and while India's IndiGo rose 8%.

In Europe, travel operator TUI was up more than

12%, Wizz Air ( WZZAF ) gained 10%, Air France-KLM

climbed around 14%, and Lufthansa was up 11% by 1132

GMT, outperforming gains in European equity indexes. U.S.

airlines rallied in premarket trading too.

While jet fuel supply disruption remains a risk, the

ceasefire provided "a buying opportunity for quality airlines",

analysts at Panmure Liberum said in a note.

STRANDED CRUISE SHIPS AND LONG RECOVERY FOR TOURISM

TUI said it was looking at options for its two cruise ships

- "Mein Schiff 4" and "Mein Schiff 5" - which have been stranded

in Abu Dhabi and Doha since the war began.

Skeleton crews are keeping the ships operational, according

to the company. It will take at least four weeks to ready them

for their next planned trips, depending on the route, weather,

and operational conditions.

Even with travel through key transit hubs potentially

reopening with a ceasefire, the Middle East's tourism industry -

worth some $367 billion - will also take time to recover.

It could take months even in a best-case scenario, Oxford

Economics economist Aaron Goldring said in a briefing.

"You basically have a tail of around seven months post

ceasefire of sentiment impact," Goldring said, "with the

perception of safety coming back quite gradually."