Global airlines are increasing ticket prices as jet fuel costs soar due to the US-Israel conflict with Iran. Airspace closures in the region are forcing reroutes and cancellations, exacerbating the disruptions. Oil prices have fluctuated sharply, impacting carriers worldwide.
The US-Israel war on Iran has triggered a surge in oil prices, pushing jet fuel costs higher and prompting airlines to hike fares. Oil reached $120 per barrel initially before dropping to around $80-$90 after President Donald Trump suggested the conflict might end soon, compared to $60 pre-war. In the US, gasoline prices climbed to $3.50 per gallon from under $3.
Cathay Pacific now charges $25,000 for a business-class round-trip from Sydney to London in April, up from $4,000-$5,000. Air New Zealand raised one-way economy fares by NZ$10 ($6) on domestic routes, NZ$20 ($11-$12) on short-haul international, and NZ$90 ($53-$54) on long-haul. Qantas increased international prices, while SAS implemented a "temporary price adjustment." An SAS spokesperson stated, "Increases of this magnitude make it necessary to react in order to maintain stable and reliable operations." Hong Kong Airlines will raise fuel surcharges by up to 35.2% from Thursday.
Airspace restrictions in Iran, Iraq, Syria, Bahrain, and Kuwait have closed key corridors, with UAE under limited ESCAT access. Airlines like Emirates, Etihad, and Qatar Airways operate reduced schedules. International carriers including British Airways, Lufthansa, and Delta have suspended flights to Dubai, Tel Aviv, and others. Qantas now routes its Perth-London flight via Singapore for refueling to avoid restricted areas.
US airlines face an extra $11 billion in jet fuel costs this year, with forecasts at $2.67 per gallon—a 37% jump. United CEO Scott Kirby noted passengers will see ticket price impacts quickly. Unlike European carriers, which hedged 60-80% of fuel (e.g., Lufthansa at 80%), US airlines largely do not hedge, making them vulnerable. Finnair warned a prolonged crisis could affect fuel availability.
The conflict disrupts one-third of Europe-Asia passenger traffic via Gulf hubs, leading to longer routes, higher fuel use, and potential travel hesitancy during peak summer booking.
