Global airlines increase fares as jet fuel costs surge amid Middle East conflict

Qantas Airways and Air New Zealand have announced fare increases following a sharp rise in jet fuel prices, which surged from $85–$90 per barrel to between $150–$200 due to the ongoing conflict in the Middle East. Air New Zealand has suspended its 2026 financial forecasts, while Qantas is currently evaluating capacity reallocation for its European routes to avoid restricted airspace. Disruptions caused by drone and missile activity have affected flight paths across the region, with Flightradar24 noting temporary holding patterns for flights near Dubai. Airline load factors to Europe have spiked to over 90 percent in March, significantly higher than the usual 75 percent. Other carriers, including Cathay Pacific and Hong Kong Airlines, have implemented fuel surcharges, while Vietnam Airlines is advocating for the removal of environmental fuel taxes. Regional impacts include the cancellation of tour packages by South Korea’s HanaTour and concerns from the Thai Ministry of Tourism regarding potential revenue losses. Industry data indicates that jet fuel costs typically account for 20% to 30% of total airline operating expenses.