The global aviation industry is facing a crisis as jet fuel prices soar, driven by the U.S.-Israeli conflict with Iran. Airlines worldwide are struggling to cope with the rising costs, leading to a cascade of consequences, including flight cancellations, fare hikes, and operational adjustments. This article delves into the impact of this crisis on various airlines, highlighting the challenges they face and the measures they are taking to mitigate the effects.
The Fuel Crisis and Its Impact
The crisis has led to a dramatic increase in jet fuel prices, with costs skyrocketing from approximately $85 to $90 per barrel to an alarming $150 to $200 per barrel in recent weeks. This surge in prices has had a substantial financial impact on carriers, where fuel can constitute up to a quarter of operating expenses. As a result, airlines are being compelled to raise fares and revise their financial outlooks.
A Global Response
The impact of the crisis is evident across the globe, with airlines in different regions taking various measures to address the challenges. Here's a breakdown of how some major airlines are responding:
Europe
- Aegean Airlines: The Greek airline expects suspended Middle East flights and a spike in fuel prices to have a "notable impact" on its first-quarter results.
- Air France-KLM: The airline group said it planned to increase long-haul ticket prices to address surging fuel costs, with cabin fares set to rise by 50 euros ($58) per round trip.
- Lufthansa: The Lufthansa Group announced on April 21 that it will cancel 20,000 flights over the next six months to save 40,000 metric tonnes of jet fuel, which it said had doubled in price.
- SAS: The Scandinavian airline said it would cancel 1,000 flights in April because of high oil and jet fuel prices, after cancelling a "couple hundred" flights in March.
Asia
- AirAsia X: The Malaysian airline's executives said the company had cut 10% of flights across the group, with a surcharge of about 20% on fuel in general.
- Cathay Pacific: The Hong Kong airline said it would cut some flights from mid-May until the end of June, cancelling about 2% of its scheduled passenger flights, while its budget airline HK Express was cutting around 6% of flights.
- China Eastern Airlines: The airline said it would raise fuel surcharges for domestic flights from April 5, with flights of 800km and below hit with a 60 yuan ($9) surcharge and a 120 yuan surcharge for flights over 800km.
- Indigo: India's biggest airline said it would introduce fuel charges on domestic and international flights from March 14, including a charge of 900 rupees for flights to the Middle East and a charge of 2,300 rupees for flights to Europe.
- Korean Air: The South Korean carrier will enter emergency management mode from April, as rising oil prices weigh on costs, a source with knowledge of the matter told Reuters.
- Qantas Airways: Australia's Qantas said it had delayed a planned A$150m ($106m) buyback and was raising its estimated fuel bill for the second half of 2026 to A$3.1bn-A$3.3bn, from a previous A$2.5bn forecast.
- Turkish Airlines: The Turkish carrier said on April 10 it had decided not to distribute any dividend from its 2025 net profit, opting to retain earnings to preserve cash.
North America
- Air Canada: Canada's largest carrier plans to trim four of its 38 daily flights to New York due to higher fuel prices.
- Alaska Air: The U.S. airline said it would increase fees for the first checked bag by $5 and by $10 for the second on its North American flights, as well as for its Hawaiian Airlines unit. It hiked prices for a third checked bag from $50 to $200.
- American Airlines: The U.S. carrier said it would hike checked baggage fees by $10 each for the first and second checked bags and by $150 for the third checked bag on domestic and short-haul international flights. It also trimmed certain benefits for economy passengers.
- Delta Air Lines: Delta said it would cut capacity by around 3.5 percentage points from its original plan and raise fees for checked bags in an attempt to offset soaring jet fuel costs, with an increase of $10 on first and second checked bags and a $50 increase on the third.
- Jetblue Airways: The U.S.-based low-cost carrier said it was increasing fees for optional services such as checked baggage as it experiences "rising operating costs". Baggage prices will rise by either $4 or $9, it said.
- Spirit Airlines: The U.S. low-cost carrier asked the Trump administration for hundreds of millions of dollars in emergency funding to offset rising fuel prices and stave off a possible liquidation, Air Current reported citing people familiar with the matter.
- Southwest Airlines: The American carrier forecast second-quarter profit below estimates as margins were dented by high fuel prices. It previously said it would hike checked baggage fees by $10 for the first and second bags, raising costs to $45 for the first bag and $55 for the second.
- United Airlines: The U.S. airline's CEO Scott Kirby said ticket prices may need to rise by as much as 15 to 20 percent to offset a surge in jet fuel costs. The company already instated five fare increases late in the first quarter, along with higher baggage fees, which it said have started to offset rising fuel costs.
Australia and Africa
- Air New Zealand: The airline said on April 7 it would slash flights through May and June and hike fares, having been one of the first to announce broad increases to ticket prices when the conflict broke out. It also suspended its full-year earnings forecast due to fuel market volatility.
- Airline Operators of Nigeria: Nigerian airlines have temporarily suspended a planned nationwide shutdown of flight operations, which was set to begin on Monday, after the government intervened amid crippling fuel prices.
- Norse Atlantic: Low-cost Norwegian airline Norse Atlantic has cancelled its flight route between London Gatwick and Los Angeles due to the rise in fuel prices.
- Pakistan International Airlines: The carrier said it would raise domestic flight fares by $20 and international fares by up to $100, citing higher fuel surcharges.
Middle East and Africa
- SunExpress: SunExpress, a joint venture between Turkish Airlines and Lufthansa, said it would impose a temporary fuel surcharge of 10 euros per passenger from May 1 on routes between Turkey and Europe. The surcharge will apply to bookings made on or after April 1 for departures on or after May 1.
- T’Way Air: The South Korean low-cost carrier said it planned to furlough some of its cabin crew without pay in May and June as part of measures to address the impact of the war.
Conclusion
The jet fuel crisis has triggered a wave of reactions from airlines worldwide, with some taking drastic measures like flight cancellations and fare hikes. However, others are focusing on cost-cutting strategies and seeking government assistance. The situation underscores the vulnerability of the aviation industry to geopolitical tensions and the need for airlines to adapt quickly to changing market conditions. As the crisis continues, the industry's resilience and ability to navigate these challenges will be put to the test.
