By Lucy Craymer
WELLINGTON, March 12 (Reuters) - Air New Zealand said on Thursday it would slash 5% of its flights, or around 1,100 services, through early May as the Iran war sends jet fuel prices surging and disrupts travel even in rural areas thousands of miles from the conflict zone.
The New Zealand carrier led other airlines including Australia's Qantas Airways, Scandinavia's SAS and Thai Airways in announcing airfare hikes this week, blaming an abrupt spike in the cost of fuel that has rattled
the global aviation sector.
The Middle Eastern conflict has forced many airlines to cancel flights to and from the region or use alternative routes due to drone and missile fire that has severely curtailed airspace and caused the biggest aviation industry crisis since the pandemic.
Oil prices climbed on Thursday after Iraqi security officials said Iranian explosive-laden boats had hit two fuel oil tankers amid other global supply disruptions and Iran said the world should be ready for oil at $200 a barrel.
Air New Zealand CEO Nikhil Ravishankar told state-owned Radio New Zealand that about 44,000 customers of the 1.9 million flying through early May would have to be reaccommodated due to domestic and international flight cuts.
Airports servicing areas such as popular New Zealand winemaking region Marlborough and west coast city New Plymouth will see a reduction in services over the coming weeks.
Fewer long-haul flights would be cut, Ravishankar said, as its U.S. routes have become a more popular stopover on the way to Europe since widespread Middle Eastern airspace closures.
"People want to get to Europe still, and over the U.S. airspace we can get them into Europe, and that's what we're focused on doing," he said.
Air New Zealand's shares were down 1% on Thursday, in line with drops in Hong Kong's Cathay Pacific, Australia's Qantas Airways and Japan Airlines.
On Wednesday, two drones fell near Dubai's main airport - the world's busiest hub for global passengers - and Bahrain evacuated some planes, as attacks on infrastructure across the Gulf continued to wreak havoc on air traffic.
The war has also disrupted shipping via the world's most vital oil export route, sent oil prices surging and upended global travel, pushing airline tickets on some routes sky-high, and sparking fears of a deep travel slump.
Travellers are also scrambling to switch to carriers that avoid Middle East airspace, with Thai Airways saying it was already taking on board more passengers to and from Europe.
Cathay Pacific has cancelled its flights to Dubai and Riyadh through the end of March and is instead adding more services to London and Zurich, taking advantage of a spike in demand for Asia-Europe flights that avoid the Middle East.
Highlighting the ripple effects of the conflict beyond the Middle East, the government in Vietnam warned on Wednesday that domestic airlines may be at risk of fuel shortages as soon as next month.
(Reporting by Lucy Cramer in Wellington and Chayut Setboonsarng in Bangkok, Writing by Anne Marie Roantree; Editing by Jamie Freed)
