Airlines hike fares, cut millions of seats as Iran war drives up fuel costs

Surging jet fuel prices are prompting carriers to slash their flight schedules, casting a cloud over summer travel rush.An Emirates plane comes in for landing at Dubai airport, UAE [File: Jon Gambrell/AP Photo]Published On 6 May 2026Kuala Lumpur, Malaysia — Theodore, a retired tech entrepreneur in Malaysia, is usually in no rush to book flights for his family’s annual holiday to South Korea and Japan, preferring to take his time to find the best deals.But this year, the 50-year-old father of three was eager to lock down his travel plans fast amid a surge in jet fuel prices that has led to thousands of flight cancellations worldwide – even if it meant giving up a bargain.Recommended Stories list of 4 itemslist 1 of 4CENTCOM: ‘Safe path’ through Hormuz is US priority in ‘Project Freedom’list 2 of 4Trump halts Hormuz operation, cites ‘great progress’ in Iran talkslist 3 of 4Buses block off roads in Bolivia as transport workers strike over fuellist 4 of 4Thai temples launch rockets in friendly festival rivalryend of listForgoing his usual choice of a budget airline, he booked seats with Korean Air and Malaysia-airlines" class="entity-link entity-organization" data-entity-id="1518" data-entity-type="organization">Malaysia Airlines last week for August and September, reasoning that the full-service carriers would be less likely to throw his plans into disarray with a last-minute cancellation.“I saw prices going up, saw budget airlines cancelling flights often, and wanted to avoid any friction later on,” Theodore, who asked to be identified by his first name only, told Al Jazeera.“It’s a life quality upgrade to reduce friction and mental cycles on issues like this,” said Theodore, who lives in Cyberjaya, about 30km (19 miles) south of Kuala Lumpur.“And the saying ‘an ounce of prevention is worth a pound of cure’ applies here in terms of potential travel plan disruptions.”As the effective closure of the Strait of Hormuz approaches the 10-week mark amid an uneasy truce between the United States and Iran, global air travel is emerging as a major casualty of elevated oil prices.Prices of jet fuel, which is primarily derived from crude oil, have risen more than 80 percent since the US and Israel launched their war on Iran in late February, prompting airlines to hike fares, reduce their schedules, or both.In the starkest example of the fallout, US-based budget carrier Spirit Airlines on Saturday announced that it would permanently cease operations in a move widely blamed on soaring fuel costs.Across a wide-ranging list of markets, including the US, China, Japan, Australia, and much of Europe, airlines have cut 9.3 million seats for the period of June 1 to September 30, according to aviation analytics firm Cirium.Flight reductions have been most pronounced in the Middle East, where aviation is still reeling from airspace closures imposed in response to Iranian attacks on regional hubs such as Dubai and Doha.Qatar Airways alone slashed two million seats scheduled for June through October, with the Emirates" class="entity-link entity-location" data-entity-id="413" data-entity-type="location">United Arab Emirates-based carriers Emirates and Etihad Airways cutting 700,000 and 450,000 seats, respectively, according to Cirium data.For the scheduled flights, ticket prices are substantially higher in many cases than they were before the war.The average international airfare from the US — across all destinations — was $1,101 in the last week of April, up 16 percent from the same period last year, according to data from travel-focused search aggregator Kayak.Domestic fares in the US have risen more steeply, jumping 24 percent year-on-year, according to Kayak.Hans Jorgen Elnaes, the founder of Norway-based aviation consultancy Winair AS, said he estimates that prices on some routes between Europe and Asia have risen as much as fivefold.“The current fare levels between Europe and Asia are not sustainable over time in my view – this is driven by high demand and limited capacity, not high jet fuel prices – and I will not be very surprised if the Gulf area airlines will soon be offering very attractive airfares between Europe and Asia via Gulf hubs,” Elnaes told Al Jazeera.At least so far, rising prices have done little to dampen consumers’ appetite for travel.While international passenger demand fell 0.6 percent worldwide in March compared with the previous year, overall demand rose more than 2 percent on the back of the strong domestic markets of many countries, according to the International Air Transport Association.While demand remains strong, the price hikes have prompted some travellers to make early bookings, said Henry Harteveldt, president of Atmosphere Research Group, a market research firm, citing the results of a survey of airline passengers he conducted in March.“One thing we learned is that uncertainty and fears of even higher fares were causes for action,” Harteveldt told Al Jazeera.“Eleven percent of all passengers said they had booked flights sooner than expected for upcoming travel between April and August,” he said.Flair Airlines passenger planes at the Vancouver airport in Richmond, British Columbia, Canada, on May 1, 2026 [Chris Helgren/Reuters]James Mundy, a PR manager at the United Kingdom-based InsideAsia Tours, said that while he has witnessed a “slight drop” in bookings and inquiries as customers assess the situation in the Middle East, demand for Asian destinations remains strong.“Japan continues to be very popular, but flight costs of direct routes have risen considerably,” Mundy told Al Jazeera.“There is also a lot of interest in Korea at the moment – still one of the fastest growing destinations for InsideAsia,” Mundy said.“The cost of a flight hasn’t risen very much and offers very good value compared to some of its neighbours,” he added.Analysts say travellers’ willingness to swallow higher costs could start to change if fuel supplies remain constrained.IATA Director General Willie Walsh warned last week that parts of Europe and Asia could see jet fuel shortages in the coming weeks.“Everybody’s watching what’s happening with jet fuel – both supply and pricing,” Walsh said in a statement.“So far, the summer is shaping up to be a normally busy time for travel,” Walsh added.“That’s positive news, but airline resilience is being tested and stabilising the supply and price of fuel is crucial.”Gary Bowerman, the director of travel-focused marketing company Check-in Asia, said the global aviation industry can expect a “difficult few months” ahead.“Even if the Strait of Hormuz were to reopen tomorrow, the deep structural damage this war has caused to energy infrastructure and supplies from the Gulf will impact the global airline sector, especially in Europe and Asia, for many months, probably longer,” Bowerman told Al Jazeera.A screen shows cancellation of Spirit Airlines flights at Fort Lauderdale airport in Florida, US, May 2, 2026 [Giorgio Viera/AFP]Harteveldt, president of Atmosphere Research Group, said the outlook for air travel is a “mixed picture”.Despite surging jet fuel prices, costs remain below the historic peak reached during the 2007-08 global financial crisis, Harteveldt said. On the other hand, a clear end to the war remains out of sight.“Even when the hostilities do conclude, it may take many months, and possibly even a year, before jet fuel prices return to more normal levels,” Harteveldt said.“Even when that happens, don’t expect airlines to lower their fares to pre-war levels,” he added.“One thing airlines have developed better than perhaps any other industry is a keen sense for understanding travellers’ willingness to pay.”