CANBERRA, NEW DELHI: 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.
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Flight disruptions due to the Middle East conflict add to problems at IndiGo whose CEO Pieter Elbers stepped down on Tuesday.
“Increases of this magnitude make it necessary to react in order to maintain stable and reliable operations,” an SAS spokesperson said in a statement, 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. 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, which had hedged over 80 percent of its first quarter fuel purchases, warned, however, that even the availability of fuel could be at risk if the conflict dragged on.
Qantas said in addition to increasing international fares, it was exploring redeploying capacity to Europe as airlines and passengers seek to evade disruptions in the Middle East
Airspace restrictions in the Middle East have dealt another blow to Indian airlines, which count the region as a corridor for flights to Europe and the US since Pakistan banned Indian carriers from its airspace last year.
As war in the Middle East forces flight rescheduling and re-routing, Indian airlines have limited options because they can’t fly over Pakistan either.
The country’s biggest international carriers Air India and IndiGo did not operate 64 percent of their 1,230 scheduled flights to the Middle East, Europe and North America in the last 10 days, Cirium data shows.
“It is a double whammy for Indian airlines which fly international routes,” said Amit Mittal, an independent aviation expert.
Pakistan has banned Indian carriers from its airspace since last April following military tensions between the two neighbors.
