Stock Markets April 27, 2026 08:10 AM

Airlines Respond to Soaring Jet Fuel Costs With Fare Hikes, Capacity Cuts and Forecast Revisions

Carriers worldwide are imposing surcharges, trimming schedules and revising guidance after jet fuel more than doubled amid the U.S.-Israeli war on Iran

By Jordan Park EZJ
Airlines Respond to Soaring Jet Fuel Costs With Fare Hikes, Capacity Cuts and Forecast Revisions
EZJ

A rapid rise in jet fuel prices, which have climbed from roughly $85-$90 per barrel to a range of $150-$200 per barrel amid the U.S.-Israeli war on Iran, has forced airlines across the globe to take a range of measures. Carriers are raising ticket prices and fuel surcharges, cutting capacity on select routes, suspending or withdrawing earnings guidance, and revising operational plans in attempts to blunt the impact of fuel as a growing share of operating costs.

Key Points

  • Jet fuel prices have jumped from roughly $85-$90 per barrel to between $150 and $200 per barrel, substantially increasing a major operating cost for airlines.
  • Airlines are responding with a mix of higher fares, new or increased fuel surcharges, capacity reductions, suspended or withdrawn profit guidance, and in some cases requests for emergency funding.
  • Sectors affected include commercial aviation directly, and ancillary industries such as aircraft leasing, airport operations, tourism and consumer travel spending due to higher ticket prices and reduced services.

(Corrects section about Turkish Airlines and Lufthansa’s joint venture SunExpress to say surcharge concerns flights to mainland Europe, not the whole continent.)

Jet fuel, which can represent up to a quarter of an airline’s operating costs, has surged in recent weeks and disrupted airline economics worldwide. Industry participants from budget carriers to national flag carriers have responded with a patchwork of measures that include immediate fare increases, new or higher fuel surcharges, reductions in planned capacity and, in some cases, suspension or withdrawal of profit guidance.

Below is a carrier-by-carrier account, alphabetized, of the measures airlines have announced in reaction to the recent jump in jet fuel prices.


AEGEAN AIRLINES

The Greek carrier said it expects its suspended Middle East services together with higher fuel prices to exert a "notable impact" on first-quarter results.

AIRASIA X

Executives at the Malaysian group said they have cut roughly 10% of flights across the airline group and introduced a general fuel surcharge of about 20%.

AIR CANADA

Canada’s largest airline plans to remove four of its 38 daily New York flights, a capacity reduction that will apply from June 1 through October 25, 2026, directly attributing the cut to elevated fuel costs.

AIR FRANCE-KLM

The group signaled it will push long-haul ticket prices higher to offset rising fuel expenses, with cabin fares slated to increase by 50 euros per round trip. KLM, the group’s Dutch unit, announced on April 16 it would cancel 160 intra-European flights in the coming month citing rising fuel costs.

AIR INDIA

Air India said it will replace its flat domestic fuel surcharge with a distance-based grid; the carrier noted that international surcharges were not adequately compensating for the exponential rise in fuel prices.

AIR NEW ZEALAND

Air New Zealand, one of the earlier carriers to raise broad ticket prices after the conflict began, said on April 7 it would reduce flights through May and June and increase fares. The carrier also suspended its full-year earnings forecast as a result of fuel-market volatility.

AIR TRANSAT

The Canadian leisure carrier plans to cut capacity by 6% from May through October in response to higher jet fuel costs, with reductions expected on routes to Europe and the Caribbean; the airline’s services to Cuba will remain suspended until October.

AKASA AIR

India’s Akasa Air introduced a fuel surcharge that ranges between 199 and 1,300 Indian rupees, equivalent to roughly $2 to $14, on domestic and international routes.

ALASKA AIR

Alaska Air withdrew its full-year profit forecast and warned of a steep hit to second-quarter earnings as higher fuel prices compress margins. The carrier also said it was trimming capacity in select markets.

AMERICAN AIRLINES

American Airlines announced increases to checked baggage fees for domestic and short-haul international travel - a $10 rise for both the first and second checked bags, and a $150 rise for the third checked bag. The carrier also said it would scale back certain economy-class benefits.

ASIANA AIRLINES

South Korea’s Asiana will cut 22 flights between April and July due to rising fuel costs, according to a Newsis report cited by the company.

CATHAY PACIFIC

Cathay Pacific raised HK$2.08 billion (about $265.58 million) through three-year fixed-rate notes priced at a yield of 3.78%, as indicated in a term sheet seen by Reuters.

CEBU AIR

The Philippines-based carrier said the sharp escalation in fuel costs is a primary concern and that it will continue to review pricing and network strategies to mitigate the impact.

CHINA EASTERN AIRLINES

China Eastern said it would increase domestic fuel surcharges from April 5. Under the new structure, flights of 800 km or less will carry a 60 yuan surcharge and flights over 800 km will carry a 120 yuan surcharge.

DELTA AIR LINES

Delta said it would cut capacity by about 3.5 percentage points relative to its original plan for the quarter and raise checked-bag fees to help offset elevated jet fuel costs. The carrier raised fees for the first and second checked bags by $10 each and increased the fee for the third checked bag by $50. Delta also pulled all planned capacity growth for the current quarter and forecast profit below Wall Street expectations.

EASYJET

EasyJet warned that it now expects a larger half-year pre-tax loss of between 540 million and 560 million pounds, reflecting a hit that included 25 million pounds of extra fuel costs in March alone.

FRONTIER AIRLINES

Frontier said it is reviewing its full-year forecast after a significant uptick in fuel prices since the outlook was issued.

GREATER BAY AIRLINES

The Hong Kong-based Greater Bay Airlines said it would raise fuel surcharges on most routes effective April 1, while leaving surcharges unchanged on flights to mainland China and Japan.

HONG KONG AIRLINES

Hong Kong Airlines announced fuel surcharge increases of up to 35% from March 12, with the largest jumps on routes between Hong Kong and the Maldives, Bangladesh and Nepal, where charges will rise to HK$384 from HK$284.

IAG (British Airways owner)

IAG said in March that it was not planning immediate ticket-price increases because it had hedged a substantial portion of its fuel requirements for the short- to medium-term.

INDIGO

India’s Indigo introduced fuel charges on domestic and international services from March 14, including a 900-rupee fee for flights to the Middle East and a 2,300-rupee fee for flights to Europe.

JETBLUE AIRWAYS

JetBlue’s CEO Joanna Geraghty told employees in a memo seen by Reuters that bankruptcy is not under consideration this year, as the carrier faces pressure from rising jet fuel costs. The company also secured a $500 million debt financing arrangement, as reported in a U.S. Securities and Exchange Commission filing.

KOREAN AIR

Korean Air said it would enter emergency management mode from April as a result of upward pressure on costs from higher oil prices, according to a source with knowledge of the matter.

LUFTHANSA

Lufthansa Group said it would remove 20,000 short-haul flights from its schedule through October, a reduction it estimated would save about 40,000 metric tons of jet fuel. The group had earlier announced the early grounding of 27 planes serving its short-haul CityLine subsidiary.

PAKISTAN INTERNATIONAL AIRLINES

The carrier said it would raise domestic fares by $20 and increase international fares by up to $100, attributing the moves to higher fuel surcharges.

QANTAS AIRWAYS

Qantas delayed a planned A$150 million buyback and raised its forecast for the second-half 2026 fuel bill to A$3.1 billion-A$3.3 billion, up from a previous estimate of A$2.5 billion.

SAS

SAS said it would cancel 1,000 flights in April because of elevated oil and jet fuel prices, after cancelling "a couple hundred" flights in March.

SPIRIT AIRLINES

Spirit reportedly asked the U.S. administration for hundreds of millions of dollars in emergency funding to offset rising fuel costs and to avert a potential liquidation, according to Air Current, which cited people familiar with the matter.

SPRING AIRLINES

China’s Spring Airlines said it would raise fuel surcharges on domestic routes from April 5, with further details to be announced later.

SOUTHWEST AIRLINES

Southwest forecast second-quarter profit below estimates, saying margins were dented by high fuel prices. The carrier previously raised checked-bag fees by $10 for the first and second bags, lifting the fees to $45 for the first checked bag and $55 for the second.

TAP AIR PORTUGAL

TAP said that its price increases would partially offset the revenue impact caused by changes in fuel prices.

THAI AIRWAYS

Thai Airways said it would increase fares by 10% to 15% to counter rising fuel costs.

TUI

TUI, the European airline and tour operator, reduced its full-year underlying profit outlook and suspended revenue guidance. The group said it incurred roughly 40 million euros in additional costs in March related to the war, including repatriation and other operational disruptions.

TURKISH AIRLINES, LUFTHANSA - SUNEXPRESS

SunExpress, the joint venture between Turkish Airlines and Lufthansa, plans to charge a temporary fuel surcharge of 10 euros per passenger on routes between Turkey and mainland Europe. The surcharge will apply to bookings made on or after April 1 for departures on or after May 1. Separately, Turkish Airlines said on April 10 it will not distribute any dividend from its 2025 net profit, choosing to retain earnings to preserve cash.

T’WAY AIR

The South Korean low-cost carrier said it plans to furlough some cabin crew without pay in May and June as part of measures tied to the impact of the war.

UNITED AIRLINES

United’s CEO Scott Kirby said ticket prices may need to increase by as much as 15% to 20% to offset higher jet fuel costs. The airline has already implemented five fare increases late in the first quarter and raised baggage fees, which United said have begun to offset some fuel-cost increases. The carrier forecast second-quarter and full-year profits below Wall Street estimates and said it expected to recoup only 40%-50% of the fuel-price increase through fares and other revenue levers in the second quarter, improving to 70%-80% in the third quarter and to as much as 85%-100% by the fourth quarter.

VIETJET

Vietjet said it adjusted flight frequencies on select routes because of possible fuel shortages.

VIETNAM AIRLINES

Vietnam Airlines plans to cancel 23 flights per week across domestic routes from April after requesting government assistance to remove an environmental tax on jet fuel, according to Vietnam’s aviation authority.

VIRGIN ATLANTIC

Virgin Atlantic said it is adding fuel surcharges to fares but that it will nevertheless struggle to return to profitability this year, according to its CEO Corneel Koster as reported.

VIRGIN AUSTRALIA

Virgin Australia said it expected an increase in jet fuel costs of around A$30 million-A$40 million for the second half of the fiscal year and planned a 1% capacity reduction in the fourth quarter.

VOLOTEA

Spanish low-cost carrier Volotea introduced a pricing policy that ties ticket costs to fuel prices and could impose a post-purchase surcharge of up to 14 euros per passenger, per flight.

WESTJET

WestJet has cut seat capacity for June, according to reports, with earlier reporting indicating the carrier would add a C$60 fuel surcharge to some bookings and consolidate flights as costs increased.


Currency conversions cited in company statements and reporting included:

  • $1 = 0.8543 euros
  • $1 = 94.0300 Indian rupees
  • $1 = 7.8320 Hong Kong dollars
  • $1 = 6.8302 Chinese yuan renminbi
  • $1 = 0.7412 pounds
  • $1 = 1.3978 Australian dollars
  • $1 = 1.3668 Canadian dollars

The measures announced by carriers vary by region and business model but consistently show a focus on cost recovery through fares, surcharges and capacity management, accompanied in many instances by revised financial guidance or funding measures to shore up liquidity.

Risks

  • Persistently elevated jet fuel prices could continue to erode airline margins, leading to further capacity reductions and potential service disruptions - directly impacting the aviation sector and travel-dependent industries.
  • Insufficient recovery of fuel-cost increases through fares and ancillary fees may force carriers to withdraw or suspend profit guidance, seek additional financing or delay shareholder returns, affecting investors and capital markets.
  • Operational constraints such as flight cancellations and furloughs prompted by higher fuel costs may depress tourism and related consumer spending in affected regions, with knock-on effects for hospitality and regional economies.

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