Jet Fuel Surge: Airlines Hike Fares as Iran Conflict Disrupts Global Aviation

Global airlines are increasing fares and reducing routes in response to a sharp rise in jet fuel prices stemming from the escalating conflict between the United States, Israel and Iran. The industry faces mounting pressure, with costs increasing by hundreds of millions of US dollars in a short period.

Fuel Costs Soar, Airlines Respond

Delta Air Lines CEO Ed Bastian reported that the surge in fuel prices increased airline costs by up to $400 million in March alone. The industry is quickly passing these increased costs onto consumers through higher ticket prices. American Airlines estimates additional costs of $400 million in the first quarter of this year due to the fuel price spike.

Flight Cuts and Airspace Closures

SAS AB, Scandinavia’s largest airline, has already begun cutting flights due to a “sharp and sudden increase” in fuel prices. The broader European aviation system is feeling the pressure. The conflict, now entering its third week as of March 18, 2026, has caused significant disruption, with flights cancelled, rescheduled, or diverted due to the closure of parts of Middle Eastern airspace because of missile and drone threats.

Global Impact on Jet Fuel Prices

Jet fuel prices have skyrocketed, doubling in Europe and increasing by nearly 80% in Asia since the attacks began in late February. Fuel represents 20% to 25% of an airline’s total operational costs, making it the second-largest expense after labor.

Supply Chain Concerns Add to Pressure

The situation is further complicated by supply-side pressures. China and Thailand have halted jet fuel exports, prompting Vietnamese authorities to warn of potential flight reductions starting in April.

Airport Disruptions and Airline Strategies

Frankfurt Airport has seen approximately 86,000 passengers affected by flight cancellations in the first two weeks of the conflict, with only about one-third of weekly connections to the Middle East still operating. Airlines are adjusting their strategies to mitigate the impact. Air France-KLM has announced increased prices for long-haul tickets to offset surging fuel costs.

While Delta is attempting to recover these costs, including potential capacity adjustments, CEO Bastian cautioned that fare increases must be carefully managed given fragile consumer confidence. American Airlines anticipates first-quarter revenue growth exceeding 10%, surpassing previous projections. However, the airline expects losses per share to remain at the lower conclude of previous guidance, reflecting continued high cost pressures.

Geopolitical Impact on Aviation

This conflict represents a recent wave of pressure on the aviation industry, which was already reeling from the effects of the COVID-19 pandemic. The geopolitical instability is creating a ripple effect across the global aviation landscape.