On Monday, AirAsia announced that it would be cutting routes and raising ticket prices by as much as 40% to mitigate the impact of the ongoing conflict.
The low-cost airline from Malaysia reported that 10% of its total flights have already been cancelled. Fare prices have surged between 31% and 40%, while fuel surcharges have leaped by about 20%.
During a media conference on Monday, co-founder and strategic advisor Tony Fernandes remarked that escalating costs were ‘inevitable’ and noted that capacity would be reduced on routes “where we don’t think we can cover the cost of fuel.”
He added that while the group does not possess “all the answers” to the geopolitical landscape, management is leveraging past experiences and is prepared to adapt, including cutting capacity or costs if required.
Low-cost carriers are particularly feeling the brunt of rising fuel prices, placing pressure on their economical business models and exposing AirAsia X’s vulnerable financial standing. Group Chief Executive Officer Bo Lingam highlighted that the airline’s primary challenge is the average cost of jet fuel, which has escalated from around $90 per barrel to approximately $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 worldwide raising fares
The International Air Transport Association reviewed data for the week ending March 20 and discovered that jet fuel prices have spiked nearly 106% from a month prior. Airfares have soared dramatically since the United States first targeted Iran on February 28. The fare increases are swiftly spreading across airlines on multiple continents:
Air New Zealand
Air New Zealand reported that jet fuel prices have surged to between $150 and $200 per barrel, compared to $85 and $90 per barrel before the unrest in Iran. One-way economy fares were raised by 20 NZ dollars ($12) on short-haul international flights, 10 NZ dollars ($6) on domestic services, and 90 NZ dollars ($53) on long-haul routes. The airline also suspended its financial projections for 2026 due to the uncertain conflict situation.
Qantas Airways
Australia’s Qantas declared increases to its international ticket prices and mentioned that it was considering reallocating capacity to Europe. The Australian airline’s shares saw a notable drop the previous day but finished the trading day 0.5% higher. The carrier is among several exploring different routing strategies to navigate airspace restrictions and cost issues.
SAS (Scandinavian Airlines)
SAS announced a ‘temporary price adjustment’ due to rising fuel costs, citing it was “necessary to respond to maintain stable and reliable operations.” The largest airline in Scandinavia also indicated that it had no fuel hedges for the upcoming 12 months, leaving it completely vulnerable to the price spike triggered by the US-Israel conflict.
Hong Kong Airlines
Hong Kong Airlines revealed on its website that starting Thursday, it would raise fuel surcharges by as much as 35.2%. The highest surcharges affected flights from Hong Kong to Bangladesh, Nepal, and the Maldives. Asian carriers, many of which operate routes that either cross or avoid the turbulent Middle Eastern airspace, are under substantial pressure.
Cathay Pacific Airways
Cathay Pacific announced it would add extra flights to London and Zurich in March to capitalize on increased demand on Asia-Europe routes caused by airspace obstructions and capacity constraints. Ticket prices on Asia-Europe routes have skyrocketed due to these limitations, with Cathay’s shares climbing 3.6%.
Finnair
Finnair, which secured over 80% of its fuel imports for the first quarter, warned that continued crises could jeopardize fuel availability. A Finnair spokesperson mentioned that a “prolonged crisis could affect not just the fuel price but also its availability, at least temporarily.”
British Airways
A representative from British Airways’ parent company, IAG, stated there are no plans to change ticket prices and that they remain unaffected in the near term. However, British Airways has postponed the conclusion of its winter-season flights to Abu Dhabi due to ‘continuing uncertainty,’ delaying all services scheduled to operate through April 11 until nearly the end of the year.
