More airlines increase airfares as Iran war drives jet fuel price spikes

More airlines increase airfares as Iran war drives jet fuel price spikes

With the Middle East conflict intensifying, travelers are encountering higher flight costs and fewer available departures. This surge is linked to escalating oil prices, a consequence of attacks on regional refineries and disruptions in oil transit via the Strait of Hormuz. Experts anticipate that ticket prices may stay high for several months, even if the conflict subsides.

The demand for routes bypassing the Middle East and Gulf has also grown, prompting additional cost increases for passengers. Airlines such as Cathay Pacific, AirAsia, and Thai Airways are among those adjusting fares to counteract the financial strain from fuel hikes. According to a statement by Ronald Lam, Cathay Pacific’s CEO, fuel expenses this month have doubled the average of the prior two months. The airline has updated fuel surcharges, effective from 18 March, impacting all its routes.

“Fuel costs have surged, forcing us to adjust pricing to manage operational expenses,” said Ronald Lam during a media briefing on Wednesday.

AirAsia announced a temporary fare increase on Thursday, vowing to revisit pricing as conditions evolve. Thai Airways projects a 10% to 15% rise in airfares, while Qantas has implemented route-specific price adjustments. Scandinavian carrier SAS has introduced a “temporary price adjustment” to address the rising costs.

Several airlines, including Air New Zealand, have also cut back on services. The carrier reported a 5% reduction in flights, cancelling around 1,100 journeys between 16 March and 3 May. This is expected to affect approximately 44,000 passengers. Air New Zealand noted it raised economy fares by NZ$10 on domestic routes, NZ$20 on short-haul flights, and NZ$90 on long-haul services in an emailed response to Reuters.

Flight suspensions have expanded to Middle Eastern destinations. Finnair has suspended Doha and Dubai services until 29 March, avoiding airspace over Iraq, Iran, Syria, and Israel. ITA Airways halted Tel Aviv flights until 2 April and extended Dubai cancellations to 28 March. KLM services to Dubai are paused until 28 March, with Tel Aviv flights cancelled for the rest of the winter season. Lufthansa Group, encompassing Lufthansa, Austrian Airlines, Swiss, and Brussels Airlines, has also paused operations to Tel Aviv and Dubai.

Non-European carriers like Delta, Cathay Pacific, and Air Canada have similarly revised schedules. Wizz Air has suspended flights to Israel until 29 March and paused services to Dubai, Abu Dhabi, Amman, and Jeddah from mainland Europe until mid-September. These changes have intensified competition for alternative routes, further driving up fares.