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What is the story about?
AirAsia, the Malaysia-based low-cost airline, has notified travellers to expect a sharp rise in ticket prices as the aviation sector struggles amid the Middle East tensions.
AirAsia declared on Monday that it would be eliminating routes and increasing ticket prices by as much as 40%, in an effort to mitigate the effects of the war.
The Malaysia-based low-cost airline reported that 10% of its total flights had already been cancelled. Fare rates have gone up between 31 and 40%, while fuel surcharges have risen up by approximately 20%.
In a media event on Monday, co-founder and strategic adviser Tony Fernandes stated that rising costs were ‘unavoidable’ and that capacity will be reduced on routes "where we don't believe we can cover the cost of the fuel."
He continued by saying that although the group does not "have all the answers" to the geopolitical scenario, management is using prior knowledge and is ready to react, including decreasing capacity or expenses if necessary.
Low-cost airlines are being particularly affected by the fuel price increase, which is putting pressure on their low-cost business models and revealing AirAsia X's fragile financial situation. Group Chief Executive Officer Bo Lingam stated that the airline's biggest problem is the average cost ofjet fuel, which has increased from around $90 per barrel to about $200.
Airlines around the world raising fares
The International Air Transport Association assessed data for the week ending March 20 and found that jet fuel prices are up almost 106% from a month ago. Airfares have risen dramatically since the United States first hit Iran on February 28. The fare hikes are spreading rapidly across carriers on multiple continents:
Air New Zealand
According to Air New Zealand, jet fuel prices have skyrocketed to between $150 and $200 per barrel, which were between $85 and $90 per barrel before the Iran attack. One-way economy rates were increased by 20 NZ dollars ($12) on short-haul international services, 10 NZ dollars ($6) on domestic routes, and 90 NZ dollars ($53) on long-haul ones. The airline also suspended its financial outlook for 2026 due to uncertainty over the conflict.
Qantas Airways
Australia's Qantas announced hikes to its international fares and stated it was investigating redeploying capacity to Europe. The Australian carrier's shares had a significant drop the day before, but they ended the day 0.5% higher. The airline is one of many looking for different routing techniques to deal with airspace limitations and cost concerns.
SAS (Scandinavian Airlines)
SAS announced a ‘temporary price adjustment’ on its prices, stating that it was "necessary to react to maintain stable and reliable operations" due to the spikes in fuel costs. The biggest airline in Scandinavia temporarily further stated that it had no fuel use covered for the next 12 months, leaving it completely exposed to the price surge spurred on by the US-Israel attack on Iran.
Hong Kong Airlines
Hong Kong Airlines announced on its website that starting on Thursday, it would increase fuel surcharges by up to 35.2%. Flights from Hong Kong to Bangladesh, Nepal, and the Maldives had the highest increases. Asian carriers, many of whom run routes that cross or avoid the disturbed Middle Eastern airspace, are under tremendous strain.
Cathay Pacific Airways
Cathay Pacific announced that it will be adding additional flights to London and Zurich in March to take advantage of the increased demand on Asia-Europe routes brought on by airspace closures and capacity limitations. Airfares on Asia-Europe routes have skyrocketed due to these airspace limitations, and Cathay's shares surged 3.6%.
Finnair
Finnair, which secured more than 80% of its fuel imports for the first quarter, cautioned that if the crisis continued, even fuel availability might be in jeopardy. A representative for Finnair stated that a "prolonged crisis could affect not only the price of fuel, but also its availability, at least temporarily."
British Airways
According to a representative for British Airways owner IAG, it has no intentions to alter ticket prices and is unaffected in the near future. However, British Airways postponed the ending of its winter-season flights to Abu Dhabi due to ‘continuing uncertainty,’ postponing all services that were supposed to run through April 11 until almost the end of the year.
AirAsia declared on Monday that it would be eliminating routes and increasing ticket prices by as much as 40%, in an effort to mitigate the effects of the war.
The Malaysia-based low-cost airline reported that 10% of its total flights had already been cancelled. Fare rates have gone up between 31 and 40%, while fuel surcharges have risen up by approximately 20%.
In a media event on Monday, co-founder and strategic adviser Tony Fernandes stated that rising costs were ‘unavoidable’ and that capacity will be reduced on routes "where we don't believe we can cover the cost of the fuel."
He continued by saying that although the group does not "have all the answers" to the geopolitical scenario, management is using prior knowledge and is ready to react, including decreasing capacity or expenses if necessary.
Low-cost airlines are being particularly affected by the fuel price increase, which is putting pressure on their low-cost business models and revealing AirAsia X's fragile financial situation. Group Chief Executive Officer Bo Lingam stated that the airline's biggest problem is the average cost ofjet fuel, which has increased from around $90 per barrel to about $200.
Malaysian
low-cost carrier AirAsia X has hiked airfares by as much as 40% and raised fuel surcharges by a fifth after jet fuel costs more than doubled in the wake of the Iran war https://t.co/xaQCCCjnA0
— Bloomberg (@business) April 6, 2026
Airlines around the world raising fares
The International Air Transport Association assessed data for the week ending March 20 and found that jet fuel prices are up almost 106% from a month ago. Airfares have risen dramatically since the United States first hit Iran on February 28. The fare hikes are spreading rapidly across carriers on multiple continents:
Air New Zealand
According to Air New Zealand, jet fuel prices have skyrocketed to between $150 and $200 per barrel, which were between $85 and $90 per barrel before the Iran attack. One-way economy rates were increased by 20 NZ dollars ($12) on short-haul international services, 10 NZ dollars ($6) on domestic routes, and 90 NZ dollars ($53) on long-haul ones. The airline also suspended its financial outlook for 2026 due to uncertainty over the conflict.
Qantas Airways
Australia's Qantas announced hikes to its international fares and stated it was investigating redeploying capacity to Europe. The Australian carrier's shares had a significant drop the day before, but they ended the day 0.5% higher. The airline is one of many looking for different routing techniques to deal with airspace limitations and cost concerns.
SAS (Scandinavian Airlines)
SAS announced a ‘temporary price adjustment’ on its prices, stating that it was "necessary to react to maintain stable and reliable operations" due to the spikes in fuel costs. The biggest airline in Scandinavia temporarily further stated that it had no fuel use covered for the next 12 months, leaving it completely exposed to the price surge spurred on by the US-Israel attack on Iran.
Hong Kong Airlines
Hong Kong Airlines announced on its website that starting on Thursday, it would increase fuel surcharges by up to 35.2%. Flights from Hong Kong to Bangladesh, Nepal, and the Maldives had the highest increases. Asian carriers, many of whom run routes that cross or avoid the disturbed Middle Eastern airspace, are under tremendous strain.
Cathay Pacific Airways
Cathay Pacific announced that it will be adding additional flights to London and Zurich in March to take advantage of the increased demand on Asia-Europe routes brought on by airspace closures and capacity limitations. Airfares on Asia-Europe routes have skyrocketed due to these airspace limitations, and Cathay's shares surged 3.6%.
Finnair
Finnair, which secured more than 80% of its fuel imports for the first quarter, cautioned that if the crisis continued, even fuel availability might be in jeopardy. A representative for Finnair stated that a "prolonged crisis could affect not only the price of fuel, but also its availability, at least temporarily."
British Airways
According to a representative for British Airways owner IAG, it has no intentions to alter ticket prices and is unaffected in the near future. However, British Airways postponed the ending of its winter-season flights to Abu Dhabi due to ‘continuing uncertainty,’ postponing all services that were supposed to run through April 11 until almost the end of the year.
