Airlines plan price hikes, cancellations and cut outlook as jet fuel prices surge

A surge in jet fuel prices driven by the U.S.-Israeli war on Iran has upended the global aviation industry, forcing airlines to raise fares, cancel flights and revise their financial outlooks.

Jet fuel prices have soared from $85 to $90 per barrel to $150 to $200 per barrel in recent weeks, a financial hit for an industry where fuel accounts for up to a quarter of operating expenses.

Lufthansa said 20,000 short-haul flights would be removed from its schedule through October, equivalent to about 40,000 metric tons of jet fuel.

The German company previously said it would ground 27 planes servicing its short-haul CityLine subsidiary earlier than planned.

Scandinavian airline SAS said it would cancel 1,000 flights in April because of high oil and jet fuel prices, after cancelling a "couple hundred" flights in March.

United Airlines CEO Scott Kirby said ticket prices may need to rise by as much as 15% to 20% to offset a surge in jet fuel costs. The company already instated five fare increases late in the first quarter, along with higher baggage fees, which it said have started to offset rising fuel costs.

The carrier also forecast second-quarter and full-year profits below Wall Street estimates.

-Anita Kobylinska/Reuters