Airfares set to rise as airlines add fuel surcharges after oil shock

Dubai: Airlines across Asia are raising ticket prices and adding fuel surcharges after sharp swings in global oil markets pushed jet fuel costs higher and disrupted key flight routes.

Carriers say the moves are necessary to offset rising operating costs linked to the conflict involving Iran, which has driven crude prices sharply higher and forced airlines to rethink flight paths that pass through the Middle East.

Travellers are already feeling the impact through higher ticket prices and additional surcharges on long-haul and regional routes.

Data from aviation analytics firm Cirium shows more than 43,000 flights scheduled to operate in and out of the Middle East were cancelled between February 28 and March 10, highlighting the scale of disruption facing airlines.

Jet fuel represents one of the largest costs for airlines and has surged in recent weeks along with crude oil prices.

Industry estimates show aviation turbine fuel can account for roughly 40% of airline operating expenses. Rising fuel prices have therefore forced many carriers to adjust pricing to maintain profitability.

Airlines are also facing rising demand on routes that bypass Middle Eastern airspace, particularly flights between Asia and Europe, which adds further pressure on ticket prices.

Several major carriers have already confirmed fare increases or additional surcharges. AirAsia said it has raised fares and adjusted fuel surcharges while monitoring market conditions.

Air India and its subsidiary Air India Express announced a phased introduction of fuel surcharges starting March 12 on both domestic and international flights.

The new charges include a Rs 399 surcharge on domestic and regional routes, while international surcharges will rise gradually depending on destination. Flights to Southeast Asia will see levies rise to $60 while Africa routes will increase to $90.

Long haul routes will face the largest adjustments from March 18, with surcharges climbing to $125 for Europe and $200 for North America and Australia.

Hong Kong Airlines has also increased fuel surcharges across multiple routes, including a 35% rise on flights to destinations such as the Maldives, Nepal and Bangladesh.

Higher prices are also being supported by strong demand from travelers adjusting their routes away from the Middle East.

Qantas said it is increasing international fares by around 5% on average after jet fuel prices surged sharply in recent weeks.

Flights on routes linking Australia and Europe are operating close to capacity this month, with seat occupancy above 90%, significantly higher than typical seasonal levels.

Thai Airways International also plans to increase ticket prices by between 10% and 15% as demand shifts toward European routes.

Carriers may need to introduce fuel surcharges to maintain operations if crude remains elevated, he said, warning that sustained oil prices around $90 a barrel would be difficult for airlines to absorb.

Airlines globally are closely watching energy markets while also navigating security concerns and flight disruptions linked to the conflict in the Middle East.

- With inputs from Bloomberg.