Jet Fuel Costs Force Airlines to Increase Ticket Prices, Cut Flights

The ongoing conflict in the Middle East and a surge in jet fuel prices are compelling airlines worldwide to raise ticket prices by an average of 10-15%, reduce flight schedules, and reassess financial projections for the year. A CEO of a major European airline, speaking candidly, described the situation as “a disaster.”

The Weight of Kerosene

Airlines are heavily reliant on fuel costs, which typically account for up to 30% of operating expenses. However, current values are pushing this figure to 45-50%, according to calculations from several low-cost carriers as reported by Leonard Berberi of Corriere della Sera. While jet fuel prices usually track crude oil, aviation fuel has recently experienced a more rapid increase.

The Price Increase

In a matter of days, the price of fuel per barrel jumped from approximately $85-90 to peaks between $150 and $200, even with Brent crude currently at $120. In Europe, carriers have been paying $1,600 per ton, compared to $830 before the conflict began. Refining margins have also reached unprecedented levels, directly impacting ticket prices.

Fuel Hedging Strategies

Despite the price hikes, many airlines had proactively engaged in “fuel hedging,” purchasing fuel at lower prices for at least the first half of the year. Virgin Australia had secured 85% of its required jet fuel, Air New Zealand 83%, Ryanair 80%, and Lufthansa 75%. Scandinavian Airlines (SAS), however, did not implement such a strategy.

Airline Responses: Surcharges and Cuts

SAS was among the first to increase flight costs, implementing a “temporary price adjustment” through a fuel surcharge. Air France-KLM announced increases of €50 on return economy tickets.

In Asia and Oceania, Air New Zealand increased its fuel surcharge by $6 (each way) on domestic flights, $12 on short international flights to Australia, and $54 on long-haul connections. Hong Kong Airlines increased its surcharge by 35.2%, adding $20 each way on long-haul routes. Air India implemented increases of $4.50 for domestic flights, South Asia, and the Middle East, $20 for Southeast Asia, $25 for Europe, $30 for Africa, and $50 for North America and Australia.

Cathay Pacific doubled its fuel surcharge for intercontinental flights, adding $76. Chief Executive Ronald Lam explained that recent fuel costs were “about double the average for January and February.” Qantas increased international fares by around 5%, while Thai Airways introduced fare increases of between 10 and 15%.

To further mitigate costs, Air New Zealand has cut 5% of its flights until early May, canceling approximately 1,100 flights and accommodating 44,000 passengers.

Significant Price Increases

Analysis indicates that Hong Kong Airlines will see the largest ticket price increase, with a 55% rise, followed by Pakistan International Airlines at almost 53%. These figures are based on return trips in Economy class.

Impact on Airline Profitability

The increases approach at a time when airlines had a narrow average profit margin of 6.6% in 2025, according to IATA data. JP Morgan estimates that a sustained 10% increase in jet fuel prices could reduce the operating profit of low-cost carrier Wizz Air by up to 31%, while the impact on Lufthansa, IAG (British Airways, Iberia), and Ryanair would be between 3% and 10%.