Price hikes, outlook cuts: What various airlines are doing as fuel costs surge

A SURGE in jet fuel prices driven by the US-Israeli war on Iran has upended the global aviation industry, forcing airlines to raise fares and revise financial outlooks.

Jet fuel prices have soared from US$85 to US$90 per barrel to US$150 to US$200 per barrel in recent weeks, a financial hit for an industry where fuel accounts for up to a quarter of operating expenses.

Below is a list of how airlines are responding, in alphabetical order:

Aegean Airlines

The Greek airline expects suspended Middle East flights and a spike in fuel prices to have a “notable impact” on its first-quarter results.

Air France-KLM

The airline group said it planned to increase long-haul ticket prices to address surging fuel costs, with cabin fares set to rise by 50 euros (S$74) per round trip.

Air New Zealand

The airline was one of the first to announce broad increases to ticket prices on March 10. It also suspended its full-year earnings forecast due to fuel market volatility.

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The price increases for one-way economy fares are set at NZ$10 (S$7.70) on domestic routes, NZ$20 on short-haul international services and NZ$90 on long-haul flights, with further price, network and schedule changes possible if fuel costs remain elevated.

Akasa Air

India’s Akasa Air said it was introducing a fuel surcharge ranging between 199 and 1,300 Indian rupees (S$2.60 to S$18) on domestic and international flights.

American Airlines

The US carrier said it expected a US$400 million increase in first-quarter expenses as fuel prices surge.

Cathay Pacific

The Hong Kong airline said it would raise fuel surcharges on all routes from April 1, its second increase in about two weeks after a March 18 hike, and review them every two weeks.

The carrier, which reviews fuel surcharges monthly, kept them steady last month at US$72.90 for flights between Hong Kong and Europe or North America.

Cebu Air

The Philippines-based airline said the sharp rise in fuel prices was a key concern and it would continue to review its pricing and network strategies to mitigate the impact.

EasyJet

EasyJet CEO Kenton Jarvis said European consumers should expect higher ticket prices towards the end of summer, when existing fuel hedges come to an end.

Frontier Airlines

The US airline is reviewing its full-year forecast as fuel prices have increased significantly since it issued the outlook.

Hong Kong Airlines

The airline said it would raise fuel surcharges by up to 35 per cent from March 12, with the sharpest increase on flights between Hong Kong and the Maldives, Bangladesh and Nepal, where charges would rise to HK$384 (S$63.30) from HK$284.

IAG

British Airways-owner IAG said on March 10 it did not plan to increase ticket prices immediately, as it has hedged much of its fuel for the short- to medium-term.

Indigo

India’s biggest airline said it would introduce fuel charges on domestic and international flights from March 14, including a charge of 900 rupees for flights to the Middle East and a charge of 2,300 rupees for flights to Europe.

The company is also lobbying the Indian government to cut fuel taxes, sources told Reuters.

JetBlue Airways

The US-based low cost carrier said it was increasing fees for optional services such as checked baggage as it experiences “rising operating costs.” Baggage prices will rise by either US$4 or US$9, the company said.

Pakistan International Airlines

The carrier said it would raise domestic flight fares by US$20 and international fares by up to US$100, citing higher fuel surcharges.

Philippine Airlines

The airline said it had adequate fuel supply to support scheduled operations, but did not have visibility beyond May to June. Company president Richard Nuttall told CNBC the Philippines might eventually consider measures such as rationing how much fuel airlines can purchase, which a few countries have already implemented.

Qantas Airways

The Australian airline, which had already said it would raise international fares, said on March 26 it would add flights to Rome, Paris and Singapore. It said it was monitoring fuel security, fuel prices and demand, and could make further changes. REUTERS