Airlines across Asia and Oceania have begun increasing ticket prices and fuel surcharges as the conflict involving Iran disrupts Middle Eastern airspace and drives jet fuel costs higher. Carriers are flying longer routes to avoid restricted areas, increasing fuel consumption and raising operating costs. The adjustments affect both long-haul routes connecting Asia, Europe, and Oceania and the broader aviation market as fuel prices rise globally.
From $85 to $200 per Barrel
Jet fuel prices have risen sharply since the escalation of the conflict. Air New Zealand stated that jet fuel, which traded between $85 and $90 per barrel before US-Israeli strikes on Iran began, climbed to between $150 and $200 per barrel. The airline suspended its 2026 financial outlook due to fuel market uncertainty.
The rapid increase reflects the combination of rising crude oil prices and refinery capacity constraints that affect the specific refined product. Brent crude rose roughly 15% to above $105 per barrel and briefly climbed as much as 29% following the conflict's escalation. Iran warned in March that oil prices could reach $200 per barrel if the conflict continues.
Aviation analytics firm Cirium reported that approximately 37,000 flights were cancelled between February 28 and March 8, representing around 56% of scheduled operations during that period across affected regions.
Thai Airways Up 15%; Air India Adding a $200 Long-Haul Surcharge
Several carriers have confirmed specific adjustments:
- AirAsia announced plans to raise ticket prices and introduce higher surcharges
- Air India announced fuel surcharge increases of up to $200 on long-haul flights, with adjustments beginning March 12 and a second increase on March 18
- Cathay Pacific announced fuel surcharge increases without specifying the amount
- Hong Kong Airlines raised surcharges by $19, bringing total surcharges to approximately $94 on certain long-distance routes
- Thai Airways announced price increases of between 10 and 15%
Air New Zealand Suspends Its 2026 Outlook Entirely
Qantas indicated fares would increase by about 5% due to higher jet fuel prices. The airline said it is considering redeploying aircraft capacity to Europe as demand patterns shift.
Air New Zealand confirmed fare increases across its network and warned further adjustments may follow. The airline suspended its 2026 financial outlook due to fuel market uncertainty. Scandinavian carrier SAS implemented a temporary price adjustment and confirmed it currently has no fuel consumption hedged for the next 12 months.
37,000 Flights Cancelled in the First Ten Days
Airspace closures across the Middle East have forced carriers to modify flight paths on routes that previously crossed Iranian or adjacent airspace. The detours add flight time and fuel consumption. On some Asia-Europe routes, additional flight time of several hours is required to circumvent the restricted zones.
Cathay Pacific said it would add flights to London and Zurich in March as airspace closures increase demand on certain Asia-Europe corridors. Qantas said it was considering redeploying aircraft capacity to Europe. These operational adjustments reflect airlines managing both cost increases and the changed demand patterns created by route disruptions.
Airlines with fuel hedging programmes are partially insulated from the immediate cost spike. Finnair, which hedged more than 80% of its first-quarter fuel purchases, noted that prolonged conflict could affect not just price but fuel availability. SAS confirmed it currently has no fuel consumption hedged for the next 12 months after modifying its hedging policy, leaving it fully exposed to spot market prices.
Frequently Asked Questions (FAQs)
Q: Why are airlines raising fares due to the Iran conflict?
A: The conflict has closed large portions of Middle Eastern airspace, forcing airlines to fly longer routes that consume more fuel. Simultaneously, global jet fuel prices have risen sharply from roughly $85 to $90 per barrel before the conflict to $150 to $200 per barrel. The combination of higher fuel costs and longer routes has increased operating expenses, prompting fare and surcharge adjustments across multiple carriers.
Q: How many flights were cancelled in the first week of the conflict?
A: Aviation analytics firm Cirium reported approximately 37,000 flight cancellations between February 28 and March 8, representing around 56% of scheduled operations during that period across affected regions in the Middle East.
Q: Which airlines have announced the largest fare increases?
A: Thai Airways announced price increases of 10 to 15%. Air India announced fuel surcharge increases of up to $200 on long-haul flights. Qantas indicated approximately 5% fare increases. AirAsia announced increases without specifying exact amounts. Air New Zealand confirmed fare increases and suspended its 2026 financial outlook due to fuel market uncertainty.
Q: What is fuel hedging and which airlines have it?
A: Fuel hedging involves airlines purchasing fuel at fixed prices in advance to reduce exposure to spot market volatility. Finnair hedged more than 80% of its first-quarter fuel purchases. Lufthansa and Ryanair have also secured portions of their fuel needs at fixed prices. SAS confirmed it has no fuel hedged for the next 12 months after modifying its policy, leaving it fully exposed to current spot prices.
Q: What operational changes are airlines making due to airspace closures?
A: Airlines are rerouting flights to avoid restricted Middle Eastern airspace, adding flight time and fuel consumption on routes that previously crossed the region. Cathay Pacific is adding flights to London and Zurich to meet increased demand on Asia-Europe corridors. Qantas is considering redeploying aircraft capacity to Europe. These adjustments affect both cost structures and network capacity planning.
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