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

More Airlines Raise Fares Amid Iran War-Driven Fuel Price Increases

Travelers are encountering higher air travel expenses and fewer flight options as tensions in the Middle East push oil prices to unprecedented levels. The ongoing conflict has disrupted oil supply chains, particularly through attacks on refineries and the closure of the Strait of Hormuz, leading to a surge in jet fuel costs. This has forced several airlines to adjust pricing strategies to cover increased operational expenses.

According to Reuters, the rise in fuel prices has prompted carriers like Cathay Pacific, AirAsia, and Thai Airways to implement fare hikes. During a media briefing on Wednesday, Ronald Lam, Cathay Pacific’s CEO, noted that fuel costs this month have doubled the average of the prior two months. The airline is updating its fuel surcharges, effective from 18 March, across all its routes.

“We are actively revising our pricing to manage the impact of fuel price increases,” stated a spokesperson for AirAsia, adding that temporary fare adjustments will be reviewed as market conditions evolve.

Thai Airways anticipates a 10% to 15% increase in airfares, while Qantas has raised prices by varying amounts depending on the route. Similarly, Scandinavian airline SAS has introduced a “temporary price adjustment,” and Air New Zealand has also increased fares, citing higher fuel expenses. The airline raised one-way economy fares by NZ$10 on domestic routes, NZ$20 on short-haul services, and NZ$90 on long-haul flights.

Many carriers have also reduced service frequencies, with some cutting routes that pass through the Middle East. Air New Zealand, for example, has canceled around 1,100 flights between 16 March and 3 May, affecting approximately 44,000 passengers. This reduction in capacity has further driven up costs, as demand for alternative routes grows.

Flight disruptions extend to several other airlines, including Finnair, ITA Airways, KLM, and Lufthansa Group. Finnair has suspended Doha and Dubai flights until 29 March and is avoiding Iraqi, Iranian, Syrian, and Israeli airspace. ITA Airways has halted Tel Aviv services until 2 April, while KLM has paused Dubai flights until 28 March. Lufthansa Group, which operates under multiple brands, has canceled all Tel Aviv services through 2 April and Dubai flights through 28 March.

Wizz Air has also suspended flights to Israel until 29 March and delayed services to Dubai, Abu Dhabi, Amman, and Jeddah from European destinations until mid-September. Non-European carriers such as Delta, Cathay Pacific, and Air Canada have similarly modified their schedules. These changes have intensified competition for routes that bypass the Middle East, contributing to fare increases.

Cathay Pacific recently highlighted its pricing strategy by offering business class return tickets from Sydney to London in April at A$39,577, underscoring the extent of cost pressures in the industry.