From AirAsia to Qantas, airlines raise fares as Iran war fuels oil price surge

Airlines in Asia and Europe, including AirAsia, Qantas, Air India, Air New Zealand, Cathay Pacific, Finnair, and Hong Kong Airlines, are increasing fares and fuel surcharges due to surging oil prices caused by the Iran war. Announced on March 12, 2026, these adjustments are a response to volatile oil markets and potential jet fuel shortages. The conflict has also led to the cancellation of over 43,000 flights in and out of the Middle East between February 28 and March 10, increasing demand for alternative routes and further driving up ticket prices. Some airlines are suspending earnings guidance due to the unpredictable fuel costs.

Several airlines, including Cathay Pacific, AirAsia, and Thai Airways, are raising airfares due to rising oil prices and restricted refinery access caused by the ongoing conflict involving Iran. This disruption has led to increased jet fuel costs, impacting airlines that haven't fully hedged their fuel expenses. Some airlines have locked in crude oil prices, but not the costs of refining it into jet fuel, leaving them exposed to price shocks. The conflict has also rerouted international travelers, increasing demand and prices on alternative routes, particularly those from Australia to Europe and India to the US. Analysts predict that long routes with limited carrier options will experience the most significant price hikes, with Australian connections to Europe, North America, and North Asia being particularly affected.