Airlines raise fares and cut flights as jet fuel prices surge

Friday 27 March 2026 - 13:00

By: Dakir Madiha

Airlines raise fares and cut flights as jet fuel prices surge

Airlines worldwide are increasing ticket prices, adding fuel surcharges, and reducing routes as jet fuel costs have nearly doubled since the outbreak of war involving Iran on February 28. Industry analysts describe the situation as the most severe disruption since the COVID-19 pandemic.

Jet fuel prices have climbed from about $85 to $90 per barrel before the conflict to between $150 and $200, according to industry data. The closure of the Strait of Hormuz, a key route for roughly one fifth of global oil supply, has disrupted supply chains and pushed refining margins to record levels.

Airlines have responded quickly. Air France KLM raised long haul economy fares by €50 per round trip. Cathay Pacific plans to increase fuel surcharges by 34 percent across all routes starting April 1. Thai Airways lifted ticket prices by 10 to 15 percent, with executives urging travelers to book early before further increases. A survey by Vietnam’s civil aviation authority found that more than 60 percent of global carriers have introduced or are planning fare hikes or surcharges since mid March.

Some airlines have taken stronger measures. Scandinavian carrier SAS announced the cancellation of at least 1,000 flights in April after already cutting hundreds in March. Its chief executive said jet fuel prices doubled within ten days. In the United States, Delta Air Lines reported an additional $400 million in fuel costs in March alone, with American Airlines expecting similar impacts.

The crisis has exposed differences in fuel risk management. Many US airlines have abandoned fuel hedging in recent years, leaving them fully exposed to price volatility. European carriers maintain more coverage. Air France KLM said it secured about 70 percent of its fuel needs for the current and next quarter. However, even hedged airlines face pressure because contracts track crude oil benchmarks rather than jet fuel, which has risen faster.

The International Air Transport Association said fare increases are unavoidable. Before the conflict, fuel accounted for about 26 percent of airline costs based on a price of $88 per barrel. Prices reached $216 on March 19. Deutsche Bank warned the surge poses an existential threat to financially weaker carriers and said capacity cuts are inevitable.

Demand has remained resilient so far. Major US airline executives said bookings stayed strong through mid March. However, industry leaders caution that sustained fare increases could eventually reduce demand. Airlines cannot absorb rising costs indefinitely if the crisis continues.

Ryanair’s chief executive said the company remains protected in the short term due to its hedging strategy. He warned that prolonged disruption, especially if the Strait of Hormuz stays closed for months, would create significant challenges for the industry.