A surge in jet fuel prices driven by the US-Israeli war on Iran has upended the global aviation industry, forcing airlines to raise fares and revise financial outlooks.
Jet fuel prices have soared from $85 to $90 per barrel to $150 to $200 per barrel in recent weeks, a financial hit for an industry where fuel accounts for up to a quarter of operating expenses.
Aegean Airlines expects suspended Middle East flights and a spike in fuel prices to have a "notable impact" on its first-quarter results, reflecting broader pressures across the global aviation sector.
EasyJet warned that European consumers should expect higher ticket prices towards the end of summer when fuel hedges expire. Frontier Airlines is also reviewing its full-year forecast as fuel prices rise.
Similarly, Air France-KLM said it planned to increase long-haul ticket prices to address surging fuel costs, with cabin fares set to rise by 50 euros per round trip. In the same context, Air New Zealand, one of the first carriers to react, announced broad ticket price increases on March 10 and suspended its full-year earnings forecast due to fuel market volatility.
Meanwhile, India’s Akasa Air said it was introducing a fuel surcharge ranging between 199 and 1,300 Indian rupees ($2 to $14) on domestic and international flights, while American Airlines expects a $400 million increase in first-quarter expenses as fuel prices surge.
At the same time, Cathay Pacific said it would hike its fuel surcharge by 34% across routes from 1 April and review them every two weeks, adding it would maintain flight capacity despite high fuel prices, though growth plans could change if demand weakens.
Hong Kong Airlines said it would raise fuel surcharges by up to 35%, while IAG, the owner of British Airways, said it does not plan immediate price increases due to fuel hedging.
In India, IndiGo introduced fuel charges on domestic and international flights from 14 March and is lobbying for tax cuts, while JetBlue Airways is increasing fees for optional services such as checked baggage as it faces “rising operating costs.”
Meanwhile, Korean Air will enter emergency management mode from April to offset rising costs, while Pakistan International Airlines plans to raise fares. Scandinavian carrier SAS said it would cancel 1,000 flights in April due to high fuel prices.
In Asia, Spring Airlines and Thai Airways both plan fare or surcharge increases, while SunExpress will impose a temporary fuel surcharge on routes between Turkey and Europe from 1 May.
Looking ahead, United Airlines is cutting unprofitable flights over the next two quarters and expects oil prices to remain above $100 until the end of 2027, although it has been able to raise fares without materially hurting bookings.
Elsewhere, VietJet has adjusted flight frequency due to potential fuel shortages, while Vietnam Airlines plans to cancel 23 domestic flights per week from April and has sought tax relief.
Finally, Virgin Australia said it is adjusting fares due to rising cost pressures linked to the Middle East situation, while Greater Bay Airlines will raise fuel surcharges on most routes from 1 April.
($1 = 0.8708 euros)
($1 = 93.9430 Indian rupees)
($1 = 7.8393 Hong Kong dollars)
($1 = 1.7470 New Zealand dollars
(Source: Reuters)
