The United States and Israel launched airstrikes on Iran on 28 February, targeting its naval and military forces and killing several of its top leaders, including former Supreme Leader Ayatollah Ali Khamenei. Tehran’s retaliation has thrown the Middle East into a renewed military confrontation and rattled global energy markets and the aviation sector.
Amid ongoing airspace restrictions, thousands of flights have been cancelled over the last two weeks, with many airlines in Asia and Europe now announcing fare hikes and fuel surcharges as the war in Iran causes sharp fluctuations in oil prices and raises concerns about possible jet-fuel shortages if the conflict escalates further, Bloomberg reported.
Additionally, demand for alternative routes to Europe that bypass the Middle East region is increasing, further pushing up the ticket prices. Over 43,000 flights scheduled to and from the Middle East were reportedly cancelled between 28 February and 10 March.
List of airlines that have increased fares and fuel surcharges:
AirAsia: Southeast Asia’s largest budget carrier announced it is increasing fares and adjusting fuel surcharges; however, it did not specify by how much. AirAsia said it will “dynamically monitor market conditions and react proactively as and when needed.”
Air India: On 10 March, Air India announced that both Air India and Air India Express are revising fuel surcharges in a phased manner, starting 12 March. The fuel surcharges across domestic and international routes.
- Starting today, under the first phase, a surcharge of ₹399 will be added to domestic flights and services to South Asia, West Asia, and the Middle East. Surcharges to Southeast Asia will rise to $60 from $40, and for Africa to $90 from $60.
2. From 18 March, the surcharge for Europe will rise from $100 to $125, and for North America and Australia by $50 to $200, in phase two.
3. Surcharges to Hong Kong, Japan, and South Korea will be announced later under phase three.
Air New Zealand: On Tuesday, the airline said it increased fares by an unspecified amount and is likely to take further pricing action while adjusting its network and schedule if fuel costs remain high. Air New Zealand also suspended its earnings guidance, stating that assumptions on fuel costs announced late last month are no longer valid.
Hong Kong Airlines: The airline has increased fuel surcharges, starting 12 March, on a select range of routes, including a a 35% increase, or HK$100 ($12.80), to the Maldives, Nepal, and Bangladesh. The surcharge on long-haul routes, such as those to Australia and North America, will increase by HK$150, bringing the total levy to HK$739.
Japan Airlines: Japan Airlines, which already charges a fuel surcharge on international routes, said it does not plan to adjust those levies before 1 April.
Qantas: Australian carrier Qantas is hiking fares on international routes by an average of 5%. Flights on European routes, including Perth–London, Perth–Paris, and services via Singapore, are operating at over 90% capacity this month, compared with a typical load factor of around 75% for this period of the year, Bloomberg reported.
SpiceJet: SpiceJet founder Ajay Singh, founder of SpiceJet, said airlines will have “no choice” but to introduce a fuel surcharge. He urged the government to cut jet fuel taxes, warning that oil prices of even $90 a barrel are “completely unsustainable.” Singh added that SpiceJet may consider grounding aircraft if high oil prices persist and that airlines could be forced to rethink expansion plans in such conditions.
Jet fuel prices soar
The aviation turbine fuel (ATF) or jet fuel prices have soared since the start of the conflict. According to a Reuters report, Air New Zealand said that the jet fuel prices, which were around $85 to $90 per barrel before the strikes, have soared to between $150 and $200.
