Global airlines are beginning to pass on rising fuel costs to passengers as oil prices rise amid the crisis. The current war between the United States and Israel against Iran.
The national airline of New Zealand, Air New Zealandsaid on Tuesday it had raised ticket prices across its network and warned that further fare adjustments could come if fuel costs remain high, Reuters news agency reported.
According to the airline, the sharp rise in jet fuel prices, caused by the escalating conflict in the Middle East, has significantly raised operating costs and created uncertainty for the global aviation industry.
Air New Zealand confirmed it has implemented fare increases on multiple routes as it seeks to offset rising jet fuel prices. The airline said one-way economy fares have increased by NZ$10 (US$5.92) on domestic routes, NZ$20 on short-haul international flights and NZ$90 on long-haul services, news agency. Reuters reported.
Jet fuel prices, which before the conflict hovered between $85 and $90 per barrel, have risen dramatically in recent days to between $150 and $200 per barrel, the airline said.
The report adds that the airline also announced that it will suspend its financial outlook for 2026, citing uncertainty arising from the conflict and volatility in fuel markets. “If the conflict leads to continued high jet fuel costs, we may have to take further pricing action and adjust our network and schedules as necessary,” the airline said in its statement to Reuters.
Air New Zealand said there are currently no disruptions to jet fuel supplies in New Zealand, but the airline is working closely with suppliers and government agencies to monitor the situation.
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Meanwhile, Hong Kong Airlines took to its website to announce it would increase its fuel surcharges by up to 35.2% starting Thursday, with the steepest increase on flights between Hong Kong and the Maldives, Bangladesh and Nepal, where charges will rise from HK$284 to HK$384 ($49).
Cathay Pacific It also revised its fuel surcharges monthly, after holding them steady last month (i.e. before the conflict began) at $72.90 each way on flights between Hong Kong and Europe and North America.
In Southeast Asia, Vietnamese airlines has called on authorities to scrap an environmental tax on jet fuel to help maintain operations. The Vietnamese government said airlines in the country have seen operating costs rise by 60% to 70% due to rising fuel prices, while suppliers struggle to meet growing demand.
Airline shares plunge after oil price rise
According to Reuters, oil prices fell to around $90 a barrel on Tuesday, down from Monday’s high of $119, easing some investor concerns. However, airline stocks in Asia showed signs of recovery after US President Donald Trump said on Monday that the conflict could end soon.
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As a result, airline stocks rallied. Air New Zealand shares rose about 2%, Korean Air Lines rose 8%, Australia’s Qantas Airways gained 1.5% and Hong Kong-based Cathay Pacific rose more than 4%, recouping some of the losses recorded earlier in the week.
Iran war-related oil price surge may slow international travel
The US-Israeli military campaign against Iran has caused turmoil in global oil markets, sharply raising crude prices and raising fears of a significant slowdown in international travel.
Rising fuel costs are a major concern for airlines because fuel is typically the second largest expense after labor, accounting for 20% to 25% of operating costs.
Conflict-related airspace disruptions are also complicating flight operations, forcing airlines to divert planes and increasing travel times and fuel consumption.
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Travel industry braces for prolonged disruption
The ongoing conflict is also beginning to affect travel demand and tourism in several regions.
Airlines are already navigating congested airspace as pilots divert flights to avoid conflict zones, reducing capacity on major long-haul routes and driving up ticket prices.
According to aviation analytics firm Cirium, Middle East airlines including Emirates, Qatar Airways and Etihad typically carry about a third of passengers flying from Europe to Asia and more than half of those flying from Europe to Australia, New Zealand and nearby Pacific islands. Any disruption to these networks could have wide-ranging effects on global travel.
Tour operators are also adjusting their plans. South Korea’s HanaTour service said it canceled group tours involving flights to the Middle East and waived cancellation fees for affected customers. All Middle East related tours for March have been suspended.
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Economies that depend on tourism also warn of financial losses. Thailand’s Ministry of Tourism has predicted that if the conflict continues for more than eight weeks, the country could lose 595,974 visitors and around 40.9 billion baht ($1.29 billion) in tourism revenue.
As the conflict continues to reshape global travel patterns and fuel markets, airlines are bracing for greater volatility. Industry analysts warn that if oil prices remain high and airspace restrictions persist, passengers around the world could face higher ticket prices and reduced flight options in the coming months.
