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Australia’s Qantas Airways, Scandinavia’s SAS and Air New Zealand announced airfare hikes on Tuesday, blaming an abrupt spike in the cost of fuel caused by the Middle East conflict.
Jet fuel prices, which were around $85 to $90 per barrel before US-Israeli strikes on Iran, have soared to between $150 and $200 per barrel in recent days, New Zealand’s flag carrier said as it suspended its financial outlook for 2026 due to uncertainty over the conflict.
The war, which disrupted shipping via the world’s most vital oil export route, has sent oil prices surging, upending global travel, pushing airline tickets on some routes sky-high, and sparking fears of a deep travel slump that could lead to widespread grounding of planes.
“Increases of this magnitude make it necessary to react in order to maintain stable and reliable operations,” an SAS spokesperson said in a statement to Reuters, adding it had implemented a “temporary price adjustment”.
The largest Scandinavian airline said last year it had temporarily adjusted its fuel hedging policy due to uncertain market conditions and that it had no fuel consumption hedged for the following 12 months. While several Asian and European airlines, including Lufthansa and Ryanair, have oil hedging in place, securing a part of their fuel supplies at fixed prices, Finnair warned that even the availability of fuel could be at risk if the conflict dragged on. Kuwait, a major jet fuel exporter to north-west Europe, has faced output cuts.
“A prolonged crisis could affect not only the price of fuel but also its availability, at least temporarily,” a Finnair spokesperson said, adding that it had not seen this happening yet. It had hedged over 80% of its first-quarter fuel purchases.
Highlighting the airspace chaos in the Middle East, planes arriving in Dubai were briefly placed in a holding pattern on Tuesday due to a potential missile attack, flight tracking service Flightradar24 said on X. The planes eventually landed.
Qantas said in addition to increasing international fares, it was exploring options to redeploy capacity to Europe as airlines and passengers seek to evade disruptions in the Middle East, where drone and missile fire have curtailed flights.
Airfares have soared on Asia-Europe routes due to airspace closures and capacity constraints, and Hong Kong’s Cathay Pacific Airways said on Tuesday it was adding extra flights to London and Zurich in March.
Air New Zealand said it had raised one-way economy fares by NZ$10 ($6) on domestic routes, NZ$20 on short-haul international services and NZ$90 on long-haul, with more adjustments to prices and schedules possible if jet fuel costs remain elevated. Hong Kong Airlines said on its website it would raise its fuel surcharges by up to 35.2% from Thursday, with the sharpest increase on flights between Hong Kong and the Maldives, Bangladesh and Nepal.
Reuters
