Airlines around the world are raising fares as war in Iran raises fuel prices around the world – National
Australia’s Qantas Airways, Scandinavia’s SAS and Air New Zealand announced flight hikes on Tuesday, blaming rising fuel costs caused by the Middle East conflict that is disrupting the global aviation industry.
Jet fuel prices, which were around $85 to $90 a barrel before the US-Israeli attack on Iran, have risen to between $150 and $200, the New Zealand flag carrier said as it suspended its financial outlook for 2026 due to uncertainty over the conflict.
The war, which disrupted shipping along the world’s most important oil export route, sent oil prices soaring, boosted global travel, pushed up airfares on other routes, and sparked fears of a major downturn in travel.
“This increase in growth necessitates a response to maintain stable and reliable operations,” a SAS spokesman said in a statement to Reuters, adding that it had made “temporary price adjustments”.
Scandinavia’s largest airline last year temporarily adjusted its fuel hedging policy due to uncertain market conditions and said it was not using fuel for the next 12 months.
Several airlines in Asia and Europe, including Lufthansa and Ryanair, have oil hedges in place, protecting part of their fuel supplies at fixed prices.
An Air Canada spokesperson told Global News that it has taken positions to protect “a small portion of our short-term needs, to manage fuel price fluctuations,” and would not comment on possible future flight increases.
Finnair, which accounted for more than 80% of its fuel purchases in the first quarter, warned that even the availability of fuel could be at risk if the dispute continued.
“A long-term problem may affect not only the price of fuel but also its availability, at least temporarily,” said a Finnair spokesperson, adding that this has not happened yet.
Kuwait, a major exporter of jet fuel to northwestern Europe, has faced production cuts.
WestJet acknowledged that fuel is one of the largest input costs for any airline and said it will increase flight rates, adding that it will continue to monitor the situation and “respond accordingly.”
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“The recent large increase due to the situation in Iran has already made operating flights more expensive, based on this, further price changes may be necessary,” said a Global News spokesperson.
AIRSPACE CONFUSION IN THE MIDDLE EAST
Highlighting the air chaos in the Middle East, flights arriving in Dubai were temporarily placed in a delay zone on Tuesday due to the missile attack, flight tracking service Flightradar24 said on X. Finally the planes landed.
Qantas said that in addition to increasing international fares, it is looking at redistributing capacity to Europe as airlines and passengers seek to escape disruption in the Middle East, where drones and missiles are reducing flights.
Air fares have risen sharply on Asia-Europe routes due to airspace closures and capacity restrictions, and Hong Kong’s Cathay Pacific Airways 0293.HK said on Tuesday it would add more flights to London and Zurich in March.
Air New Zealand said it has increased one-way economy fares by NZ$10 ($6) on domestic routes, NZ$20 on short-haul international services and NZ$90 on long-haul flights, with further adjustments to prices and schedules likely if jet fuel costs continue to rise.
Hong Kong Airlines said on its website that it will increase fuel prices by up to 35.2% from Thursday, with the biggest increase on flights between Hong Kong and the Maldives, Bangladesh and Nepal.
Still, some European airlines say they see no immediate need to take action yet. A spokesman for British Airways-owner IAG ICAG.L said it was well hedged for the near future and had no plans to change ticket prices.
British Airways said on Tuesday it had brought the end of its winter season flights to Abu Dhabi due to “ongoing uncertainty”, canceling all services until the end of the year which were due to run until April 11.
AIRLINE SHARE STABILIZES AFTER SALE
Some airline stocks rose and oil prices fell to around $90 a barrel on Tuesday from $119 on Monday after US President Donald Trump said on Monday the war could end soon.
When markets opened in Europe, airline stocks were up between 4% and 7%. Shares of major US carriers Delta Air Lines DAL.N, United Airlines UAL.O, Southwest Airlines LUV.N and American Airlines AAL.O were down between 2% and 4% in early trading.
US airlines rely less on hedging than their European and Asian rivals to manage fuel costs, making their shares more vulnerable to oil volatility.
In Asia, Qantas closed 0.5% higher, Korean Air Lines 003490.KS rose 3% and Cathay Pacific 0293.HK rose 3.6%. All recorded major declines on Monday.
Fuel is the second largest expense for airlines after labor, typically accounting for a fifth to a quarter of operating costs.
COMMUNICATIONS WHICH ARE RECEIVING AIRSPACE
In addition to high fuel costs, tightening airspace also threatens to hamper the global travel industry, as pilots turn around to avoid Middle East conflict and the capacity of popular routes fills up.
Emirates, Qatar Airways and Etihad generally account for about one-third of passenger traffic between Europe and Asia and fly more than half of all passengers from Europe to Australia, New Zealand and nearby Pacific islands, according to Cirium.
European airlines are already struggling with a shortage of available airspace created by the war in Ukraine, with many avoiding Russian airspace and flying long international routes. Now, with less airspace available, they say their business has become more difficult.
-With additional files from Global News
