FACTBOX: Price hikes, outlook cuts - What airlines are doing as fuel costs surge

Global Aviation Industry Struggles Amid Surge in Jet Fuel Prices

The ongoing conflict between the U.S. and Israel, coupled with tensions surrounding Iran, has caused a significant surge in jet fuel prices, creating a ripple effect across the global aviation industry. In recent weeks, the price of jet fuel has skyrocketed from $85-$90 per barrel to a staggering $150-$200 per barrel. For an industry where fuel accounts for up to 25% of operating expenses, this increase has led to a dramatic shift in financial strategies.

As airlines grapple with soaring costs, many are forced to make tough decisions regarding flight operations, pricing structures, and financial forecasts. Below is a breakdown of how airlines from around the world are responding to the crisis, listed in alphabetical order.

AEGEAN AIRLINES (AGNr.AT)

The Greek carrier has announced that the suspension of Middle East flights, combined with the fuel price hike, will significantly impact its first-quarter earnings.

AIRASIA X (AIRX.KL)

Malaysia's AirAsia X has responded by cutting 10% of its flights and imposing a 20% surcharge on fuel across its operations.

AIR CANADA (AC.TO)

Canada's largest airline has decided to reduce its daily flights to New York, trimming four of its 38 daily departures to JFK International Airport from June 1 to October 25, 2026, as a direct result of the rising fuel costs.

AIR FRANCE-KLM (AIRF.PA)

The Air France-KLM group is raising long-haul ticket prices by €50 ($58) to counterbalance the escalating fuel prices. Additionally, KLM will cancel 160 flights across Europe over the coming month.

AIR INDIA

The Indian airline is shifting from a flat domestic fuel surcharge to a distance-based grid. It acknowledged that surcharges on international routes are insufficient to cover the recent exponential rise in fuel costs.

AIR NEW ZEALAND (AIR.NZ)

New Zealand’s flagship carrier is slashing flights and hiking fares. It has also suspended its full-year earnings forecast due to market volatility.

AKASA AIR

The low-cost Indian carrier is introducing a new fuel surcharge ranging from ₹199 to ₹1,300 ($2 to $14) on both domestic and international flights.

ALASKA AIR (ALK.N)

Alaska Airlines has withdrawn its full-year profit forecast, citing the pressure placed on its margins by the sharp rise in fuel prices.

AMERICAN AIRLINES (AAL.O)

American Airlines has increased its checked baggage fees by $10 for the first and second checked bags, and $150 for the third checked bag on domestic and short-haul international flights. The airline has also reduced certain benefits for economy passengers.

ASIANA AIRLINES (020560.KS)

South Korea's Asiana Airlines will cut 22 flights between April and July as a result of the rising fuel prices.

CATHAY PACIFIC (0293.HK)

The Hong Kong-based airline group is raising funds by issuing a fixed-rate bond, expected to yield around HK$2 billion ($255 million), to help offset the impact of rising fuel prices.

CEBU AIR (CEB.PS)

The Philippines-based carrier has expressed concerns over the sharp rise in fuel prices and stated that it will continuously reassess its pricing and network strategies.

CHINA EASTERN AIRLINES (600115.SS)

China Eastern is implementing a surcharge of 60 yuan ($9) for flights under 800 km and 120 yuan ($17) for flights over 800 km.

DELTA AIR LINES (DAL.N)

Delta Airlines has reduced its capacity by 3.5% and raised checked baggage fees by $10 for the first and second bags, and $50 for the third. The airline has also revised its profit expectations for the current quarter, forecasting a shortfall.

EASYJET (EZJ.L)

The low-cost European carrier EasyJet has warned of a larger-than-expected half-year loss, estimating between £540 million and £560 million ($731 million to $758 million), with an additional £25 million in fuel-related costs in March.

FRONTIER AIRLINES (ULCC.O)

The U.S. budget airline has revised its full-year forecast due to the increased fuel costs and is actively assessing its financial position.

GREATER BAY AIRLINES

The Hong Kong-based airline has announced it will raise fuel surcharges on most routes starting April 1, except for routes to mainland China and Japan.

HONG KONG AIRLINES

Hong Kong Airlines is raising fuel surcharges by up to 35%, with the largest increase impacting flights between Hong Kong and the Maldives, Bangladesh, and Nepal.

IAG (ICAG.L)

The parent company of British Airways, IAG has stated that it does not plan to immediately raise ticket prices, as much of its fuel is already hedged for the short- to medium-term.

INDIGO (INGL.NS)

India's largest airline is introducing fuel charges on both domestic and international routes, including surcharges of ₹900 for Middle Eastern flights and ₹2,300 for European flights.

JETBLUE AIRWAYS (JBLU.O)

Despite facing challenges from rising fuel prices, JetBlue CEO Joanna Geraghty has reassured employees that bankruptcy is not a consideration for the airline this year. JetBlue has secured a $500 million debt financing agreement to support its operations.

KOREAN AIR

Korean Air is entering an emergency management mode due to the rising costs associated with the war, as it looks to mitigate the impact on its financial stability.

LUFTHANSA (LHAG.DE)

The Lufthansa group will ground 27 short-haul planes and retire four older Airbus A340-600 long-haul aircraft earlier than planned to manage the higher fuel prices.

PAKISTAN INTERNATIONAL AIRLINES

PIA will raise domestic fares by $20 and international fares by up to $100 to address the rising fuel surcharges.

QANTAS AIRWAYS (QAN.AX)

Australia’s Qantas has delayed a planned A$150 million ($106 million) buyback and revised its fuel cost forecast for the second half of 2026 to A$3.1 billion-A$3.3 billion, up from a previous estimate of A$2.5 billion.

SAS

Scandinavian Airlines has announced it will cancel 1,000 flights in April, following a reduction of several hundred flights in March due to the soaring fuel prices.

SPIRIT AIRLINES

Spirit Airlines is seeking emergency funding from the U.S. government to offset the significant rise in fuel prices, as it faces financial strain.

SPRING AIRLINES (601021.SS)

The Chinese budget airline will raise fuel surcharges for domestic flights starting April 5, with the specific surcharge amount to be announced later.

SOUTHWEST AIRLINES (LUV.N)

Southwest Airlines will increase checked baggage fees by $10 for the first and second bags. The U.S. carrier has also made adjustments to its flight routes in response to the rising fuel costs.

TAP

Portugal’s TAP airline is implementing price hikes to partially offset the impact of higher fuel prices on its revenue.

THAI AIRWAYS (THAI.BK)

Thai Airways is raising fares by 10%-15% to compensate for the increasing fuel prices.

TURKISH AIRLINES (THYAO.IS) & LUFTHANSA (LHAG.DE)

Turkish Airlines and Lufthansa’s joint venture, SunExpress, will impose a temporary fuel surcharge of €10 per passenger on routes between Turkey and Europe starting May 1.

T'WAY AIR (091810.KS)

South Korean low-cost carrier T'way Air plans to furlough some of its cabin crew without pay in May and June as part of its cost-management strategy.

UNITED AIRLINES (UAL.O)

United Airlines is cutting unprofitable flights and expects oil prices to stay above $100 until 2027. The airline is also increasing baggage fees by $10 for domestic and international travelers.

VIETJET (VJC.HM)

The Vietnamese low-cost carrier is adjusting flight frequencies on selected routes due to potential fuel shortages.

VIETNAM AIRLINES (HVN.HM)

Vietnam Airlines plans to cancel 23 domestic flights per week from April and is seeking government support to remove an environmental tax on jet fuel.

VIRGIN ATLANTIC

Virgin Atlantic has added fuel surcharges to its fares but is still struggling to return to profitability this year due to the rising cost of fuel.

VIRGIN AUSTRALIA (VGN.AX)

Virgin Australia expects an increase in jet fuel costs of approximately A$30 million-A$40 million in the second half of this fiscal year and a 1% reduction in capacity in the fourth quarter.

VOLOTEA

The Spanish low-cost airline Volotea has introduced a new pricing policy that links ticket prices to fuel costs, potentially adding up to a €14 surcharge per passenger.

WESTJET

Canada’s WestJet has reduced seat capacity for June and added a C$60 ($43) fuel surcharge to certain bookings in response to soaring fuel costs.

The surge in jet fuel prices, a direct result of geopolitical tensions, is reshaping the airline industry. With costs rising, airlines worldwide are forced to find creative solutions, from increasing ticket prices to cutting flight capacities and introducing surcharges. The coming months will see continued adjustments as carriers strive to stay afloat in this challenging environment.

-Reporting by Mireia Merino, Marleen Kaesebier, Bernadette Hogg, Dimitri Rhodes/Reuters