Flight Prices Jump as Fuel Costs Soar Due to Middle East Conflict

Airlines worldwide are raising ticket prices as jet fuel costs have doubled from around $85-90 per barrel to $150-200 due to the Middle East conflict. Air New Zealand became one of the first carriers to announce widespread fare increases, while airline stocks showed signs of recovery after initial sharp declines.

Travelers can expect to pay more for flights as airlines worldwide respond to skyrocketing fuel costs triggered by the ongoing Middle East conflict.

Air New Zealand announced Tuesday that it has increased ticket prices and warned of potential additional fare hikes as jet fuel expenses have surged dramatically. The airline reported that fuel costs, previously ranging from $85 to $90 per barrel before the conflict began, have now climbed to between $150 and $200 per barrel in recent days.

The carrier has implemented fare increases of NZ$10 ($5.92) for domestic one-way economy tickets, NZ$20 for short-distance international flights, and NZ$90 for long-distance routes. Due to ongoing uncertainty surrounding the conflict, the airline has also suspended its 2026 financial projections.

“If the conflict leads to continued elevated jet fuel costs, we may need to take further pricing action and adjust our network and schedule as required,” Air New Zealand stated.

The U.S.-Israeli conflict with Iran has caused oil prices to spike dramatically, creating widespread disruption in global travel markets and raising concerns about potential flight cancellations and reduced service.

Other airlines are also feeling the pressure. Vietnam Airlines has petitioned local officials to eliminate environmental taxes on jet fuel to help maintain operations. The Vietnamese government reported that domestic carriers are facing operating cost increases of 60% to 70% due to rising fuel prices, with suppliers struggling to meet airline demand.

Air New Zealand indicated that while New Zealand currently has adequate jet fuel supplies, the company is maintaining close communication with suppliers and government officials to track global developments.

Following Monday’s market turbulence, airline stocks began showing signs of recovery after President Donald Trump suggested the conflict might end soon. This announcement helped oil prices retreat to approximately $90 per barrel on Tuesday from Monday’s peak of $119.

Asian airline stocks demonstrated stabilization, with Air New Zealand climbing 2% after Monday’s nearly 8% decline. Korean Air Lines increased 6% following the previous day’s 8.6% drop, while Qantas Airways gained over 1% after falling 4.5% on Monday. Japan Airlines also rose more than 2%.

Fuel represents airlines’ second-largest operational expense after labor costs, typically comprising 20% to 25% of total operating expenses. While some major Asian and European carriers have oil price hedging strategies in place, most U.S. airlines discontinued this practice over the past twenty years.

Elevated oil prices and airspace restrictions due to the conflict are limiting airline capacity, driving ticket prices significantly higher on certain routes and causing travelers to reconsider their plans as the busy summer travel season approaches.

The conflict is having broader impacts on the travel industry. Major Middle Eastern carriers Emirates, Qatar Airways, and Etihad typically transport about one-third of passengers traveling from Europe to Asia and more than half of all travelers from Europe to Australia, New Zealand, and surrounding Pacific Islands, according to aviation data firm Cirium.

South Korean travel company HanaTour Service has begun canceling group tours involving Middle East destinations, including Dubai trips and European itineraries with Dubai connections. The company is waiving cancellation fees for affected customers and has suspended all Middle East-related tours for March.

Thailand’s Ministry of Tourism projects that if the conflict continues beyond eight weeks, the country will lose nearly 596,000 tourists and approximately 40.9 billion baht ($1.29 billion) in tourism revenue.