A sharp spike in global jet fuel prices triggered by rising tensions between the United States, Israel and Iran has begun to impact aviation markets worldwide. Over the past few weeks, aviation turbine fuel has shot up from 85 to 90 dollars per barrel to nearly 150 to 200 dollars per barrel. Since fuel accounts for nearly 25 per cent of operating costs for most airlines, carriers are now resorting to fare hikes and financial restructuring to stay afloat.
IndiGo, Air India begin raising ticket prices
Major carriers including Air India, IndiGo and United Airlines have already revised ticket prices upward. Several airlines have introduced fuel surcharges, increased baggage fees and reworked service charges. Many operators are reassessing their financial outlook, postponing expansion plans and prioritising cost control to deal with the mounting pressure.
Key airline measures announced globally
- Air Asia: The carrier has reduced its total flights by nearly 10 per cent while introducing a fuel surcharge of around 20 per cent.
- Air India: Fuel surcharge is now distance-based. Short routes between 0 and 500 km attract Rs 299, while routes exceeding 2,000 km include an additional Rs 899. The revised structure took effect on April 8 for domestic and April 10 for international travel.
- IndiGo: The largest Indian carrier has introduced a fuel surcharge of up to Rs 950 on domestic flights and up to Rs 10,000 on long-haul international routes.
- Air France KLM: Long-haul fares are set to rise by up to 50 euros, which is approximately Rs 5,000 per round trip.
- Air New Zealand: The airline has raised fares, cut several flights for May and June and suspended its annual financial guidance due to uncertainty over fuel prices.
- Akasa Air: A fuel surcharge ranging from Rs 199 to Rs 1,300 has been applied since March 15.
- Alaska Airlines: The airline has increased charges for the first and second checked bags and imposed a significant hike for the third bag.
- American Airlines: Baggage charges have gone up and certain economy services have been reduced.
- Delta Air Lines: Flight capacity has been trimmed by about 3.5 percent. Baggage fees have increased and major financial investments for the year have been deferred.
- Pakistan International Airlines: Domestic fares have increased by 20 dollars, while international fares have gone up by 100 dollars.
- Turkish Airlines and Lufthansa (SunExpress JV): A temporary fuel surcharge of 10 euros per passenger will be applicable from May 1.
- United Airlines: The airline has cut loss-making routes, raised baggage fees and updated its long-term strategy expecting elevated oil prices till 2027.
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