Airlines tackle fuel cost surge with price hikes, outlook cuts

A surge in jet fuel prices from US$85-US$90 (S$109- S$115) to US$150-US$200 per barrel amid the US-Israeli war against Iran has blindsided the aviation industry, where fuel accounts for up to a quarter of operating expenses, forcing airlines to raise fares and revise financial outlooks.

Below is a list of how airlines are responding, in alphabetical order:

Aegean airlines

The Greek airline expects suspended Middle East flights and a spike in fuel prices to have a "notable impact" on its first-quarter results.

AirAsia X

The Malaysian carrier said it would suspend services on routes between Melbourne and Denpasar and Adelaide and Denpasar from June 18 due to increased fuel prices.

Executives previously said the airline had cut 10 per cent of flights and introduced a surcharge of about 20 per cent on fuel.

Air Canada

Canada's largest carrier has suspended its full-year guidance due to fuel price volatility.

It had previously announced plans to trim four of its 38 daily flights to New York due to higher fuel prices.

Air China, China Southern Airlines, regional Chinese carriers

Chinese airlines will raise fuel surcharges for domestic flights from May 16, with surcharges for domestic flights of 800km or less to rise by 30 to 90 yuan (S$6 to S$17). 

For longer domestic routes, surcharges will increase by 50 to 170 yuan.

Air France-KLM

The airline group expects a US$2.4 billion increase in its fuel bill this year. 

It downgraded its full-year capacity outlook to an increase of two per cent to four per cent, having previously guided for three per cent to five per cent growth.

It earlier announced plans to increase long-haul ticket prices to address surging fuel costs, with cabin fares set to rise by 50 euros (S$74) per round trip.

The group's Dutch arm KLM said on April 16 it would cancel 160 flights in Europe in the coming month due to rising fuel costs.

Air India

The Indian carrier will temporarily cut flights on several international routes between June and August.

Bloomberg News previously reported the airline had discussed furloughing non-technical employees and cutting flight capacity by more than 20 per cent for the next three months.

Air India also said it would revise its fuel surcharge from a flat domestic surcharge to a distance-based grid. 

It said surcharges on international routes did not compensate for the exponential rise in fuel prices.

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Air New Zealand

The New Zealand-based airline forecast its largest pre-tax annual loss in four years and said it would review its capital spending plans and the timing of aircraft deliveries to better align with demand and market conditions.

The carrier has hiked fares and consolidated capacity thrice, having been one of the first to announce broad increases to ticket prices when the conflict broke out. 

It warned there could be further capacity consolidation if fuel prices stay high.

Air Transat

The Canadian airline said it would reduce planned capacity by six per cent from May to October this year, with cuts expected on routes to Europe and the Caribbean, and with its service to Cuba remaining suspended until October.

Akasa Air

India's Akasa Air introduced a fuel surcharge ranging between 199 and 1,300 Indian rupees (S$3 to $17) on domestic and international flights.

Alaska Air

The US airline launched a US$500 million debt offering as the sharp rise in fuel prices puts pressure on margins.

The carrier previously withdrew its full-year profit forecast and warned of a steep hit to second-quarter earnings. 

It has also trimmed capacity in some markets.

American Airlines

The US carrier slashed its 2026 profit forecast, pushing the lower end of expectations to a loss, and said it expected the jet fuel bill to increase by more than US$4 billion this year.

It has hiked checked baggage fees by US$10 each for the first and second bags and by US$150 for the third bag on domestic and short-haul international flights, and trimmed certain benefits for economy passengers.

ANA

The Japanese airline said higher fuel prices would lift costs by about 140 billion yen (S$1.12 billion) this year, though hedging, fares and cost cuts are expected to limit the impact to around 60 billion yen. 

It is also considering a domestic fuel surcharge for the financial year starting in April 2027.

Asiana Airlines

The South Korean airline will slash 22 flights between April and July due to the fuel cost increase, Newsis reported.

Cathay Pacific

The Hong Kong airline will lower fuel surcharges for most passenger flights from May 16 as part of an "agile response" to the volatility of jet fuel prices, it said.

Cebu Air

The Philippines-based airline said it had implemented fare adjustments and surcharges across parts of its network in response to fuel price pressures.

Delta Airlines

Delta said it would cut capacity by around 3.5 percentage points from its original plan and raise fees for checked bags in an attempt to offset jet fuel costs, with an increase of US$10 on first and second checked bags and a US$50 increase on the third.

The US airline pulled all planned capacity growth for the second quarter and forecast profit below Wall Street expectations.

EasyJet

EasyJet warned of a bigger half-year pre-tax loss of 540-560 million pounds (S$921-955 million), including 25 million pounds in extra fuel costs in March.

Frontier Airlines

A group of US budget airlines including Frontier has pitched a US$2.5 billion relief plan to the US government, the Wall Street Journal reported. 

The figure is based on how much more the group expects to pay for jet fuel this year compared to earlier forecasts, the report said.

The carrier has said it is reviewing its full-year forecast as fuel prices have increased significantly since it issued it.

Greater Bay Airlines

The Hong Kong-based company said it would raise fuel surcharges on most routes from April 1, while keeping them unchanged on mainland China and Japan routes.

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Hong Kong Airlines

The airline said it would raise fuel surcharges by up to 35 per cent from March 12, with the sharpest increase on flights between Hong Kong and the Maldives, Bangladesh and Nepal, where charges would rise to HK$384 (S$63) from HK$284.

IAG

British Airways-owner IAG warned its annual profit would be lower than forecast, as soaring jet fuel costs and supply disruptions weigh on earnings more than expected.

It previously said it would raise ticket prices to reflect higher fuel costs, as, despite fuel hedges, it was "not immune" to the broader fallout from fuel cost volatility.

Indigo

India's biggest airline said it would introduce fuel charges on domestic and international flights from March 14, including a charge of 900 rupees for flights to the Middle East and a charge of 2,300 rupees for flights to Europe.

Jetblue Airways

JetBlue suspended its full-year outlook and said it would slow hiring, cut capacity and hike fares to soften the impact of soaring fuel costs.

Korean air

The South Korean carrier entered an emergency management mode from April, as rising oil prices weigh on costs, a source with knowledge of the matter told Reuters.

Latam Airlines

The Chile-based carrier cut its 2026 core earnings forecast after higher fuel prices drove up costs.

Lufthansa

The German airline group said it would face a 1.7 billion euro hit from jet fuel prices in 2026.

ITA Airways, a part of the group, said it would raise ticket prices between five per cent and 10 per cent in 2026 to compensate for the rising fuel costs.

In April, the Lufthansa group unveiled a new Economy Basic low-cost fare option for short- and medium-haul flights, which will limit free carry-on bags to only a "laptop bag or a small backpack".

It previously removed 20,000 short-haul flights from its schedule through October, saying it was equivalent to about 40,000 metric tons of jet fuel.

Pakistan International Airlines

The carrier said it would raise domestic flight fares by US$20 and international fares by up to US$100, citing higher fuel surcharges.

Qantas Airways

Australia's Qantas said it had delayed a planned A$150 million (S$137 million) buyback and was raising its estimated fuel bill for the second half of 2026 to A$3.1-3.3 billion, from a previous A$2.5 billion forecast.

Ryanair

Ryanair CEO Michael O'Leary warned the low-cost airline's profit may come under "a bit of pressure" in the fiscal year ending March 2027 if oil prices remain at high levels.

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SAS

The Scandinavian airline 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.

Spirit Airlines

The US low-cost carrier shut down abruptly after collapsing under financial pressures, including the sharp rise in fuel costs.

Spring Airlines

The Chinese budget airline said it would raise fuel surcharges on domestic flights from April 5.

Southwest Airlines

The US carrier forecast second-quarter profit below market expectations and its CEO warned the fuel spike would be a billion-dollar headwind for the airline in the quarter.

It previously hiked checked baggage fees by $10 for the first and second bags, raising costs to US$45 for the first bag and US$55 for the second.

TAP

The Portuguese airline said price hikes would partially mitigate the impact of fuel price changes on its revenue.

Thai AirAsia

The Thai low-cost carrier said it would reduce overall seat capacity by an average of 30 per cent between May and June to mitigate the impact of fuel prices and softening demand.

Thai Airways

The Thailand-based carrier said it would raise fares by 10 per cent to 15 per cent to address rising fuel costs.

TUI

The European airline and tour operator cut its full-year underlying profit outlook and suspended revenue guidance, saying it had incurred about 40 million euros in extra costs due to the war in March, including repatriation efforts and operational disruptions.

Turkish Airlines, Lufthansa

SunExpress, a joint venture between Turkish Airlines and Lufthansa, said it would impose a temporary fuel surcharge of 10 euros per passenger on routes between Turkey and mainland Europe. 

The surcharge will apply to bookings made on or after April 1 for departures on or after May 1.

Turkish Airlines said on April 10 it had decided not to distribute any dividend from its 2025 net profit, opting to retain earnings to preserve cash.

T'Way Air

The South Korean low-cost carrier said it planned to furlough some of its cabin crew without pay in May and June as part of measures to address the impact of the war.

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United Airlines

The US airline's CEO Scott Kirby said ticket prices may need to rise by as much as 15 per cent to 20 per cent to offset a surge in fuel costs. 

The company already instated five fare increases late in the first quarter, along with higher baggage fees, which it said had started to offset rising fuel costs.

The carrier also forecast second-quarter and full-year profits below Wall Street estimates and said it expected to recover only 40-50 per cent of the increase in fuel prices through fares and other revenue measures in the second quarter, improving to 70-80 per cent in the third and to as much as 85-100 per cent by the fourth.

Vietjet

The Vietnamese budget airline said it had adjusted flight frequency on selected routes due to potential fuel shortages.

Vietnam Airlines

The carrier plans to cancel 23 flights per week across domestic routes from April, Vietnam's aviation authority said, after the airline requested government assistance to remove an environmental tax on jet fuel.

Virgin Atlantic

The airline is adding fuel surcharges to fares but will still struggle to return to profitability this year, CEO Corneel Koster told the Financial Times.

Virgin Australia

Virgin Australia said it expected an increase in fuel costs of around A$30-40 million for the second half of this fiscal year, and a one per cent reduction in capacity in the fourth quarter.

Volotea

The Spanish low-cost airline introduced a new pricing policy linking ticket prices to fuel costs, which could potentially add a post-purchase surcharge of up to 14 euros per passenger, per flight.

Westjet

The Canadian airline has cut seat capacity for June, the Globe and Mail reported. 

The Canadian Press previously reported that the carrier would add a C$60 ($44) fuel surcharge to some bookings and combine flights as costs soar.

Wizz Air

The low-cost carrier revised its guidance upwards, citing strong forward bookings and swift action to offset soaring fuel prices and flight cancellations by adding capacity on existing and new routes and using promotional fares. 

It had issued a profit warning at the start of the Iran war.

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