Airlines in the Asia-Pacific region, including Qantas, Air India, and Cathay Pacific, have announced fare hikes in response to surging jet fuel prices caused by supply disruptions stemming from the war in the Middle East [1]. The average world price of aviation fuel reached $173.91 a barrel on Monday, according to the Platts index, nearly double the levels seen in January and significantly higher than crude oil prices [1]. The International Air Transport Association (IATA) attributes this to increased refining costs and the lower priority of kerosene compared to petrol or diesel [1].
The conflict has severely impacted trade through the Strait of Hormuz, which typically carries nearly 20 percent of global oil production. This disruption is particularly acute for Asia, as more than 80 percent of the oil and gas passing through the strait is destined for Asian markets, according to the U.S. Energy Information Administration [1]. Air India stated that since early March 2026, aviation turbine fuel (ATF), which constitutes nearly 40 percent of an airline's operating costs, has seen significant price escalation due to supply interruptions. The airline also cited high Excise Duty and VAT on ATF in major cities like Delhi and Mumbai as factors amplifying the strain on operating economics [1].
Air India will implement price increases in three phases, starting with a $4.30 surcharge on domestic flights from Thursday and an additional $20 on flights to Southeast Asia. On March 18, surcharges for Europe will rise by 25 percent to $125, and by 33 percent to $200 for North America. Details on the third phase were not provided [1]. Cathay Pacific announced its own surcharges, noting that fuel prices doubled in March compared to the average of the previous two months [1]. Qantas reported fare increases that will vary by route, as jet fuel costs rose up to 150 percent over the past fortnight. Despite hedging measures, Qantas stated that the situation leads to higher costs for the entire group [1]. Dean Long from the Australian Travel Industry Association indicated that international airfares would rise by about five percent across the board, but the full impact of the war may not be felt for another three to six months [1].
Ajay Singh, founder of India's low-cost carrier SpiceJet, urged Delhi to reduce taxes on jet fuel, warning that even $90 a barrel of oil was "totally unsustainable" and did not rule out the possibility of grounding part of his fleet if oil prices continue to rise [1]. Thai Airways finance director Rut Rugsumruad told investors that the airline can increase fares "by 10–15 pe" [1].
CONCLUSION
The ongoing conflict in the Middle East has led to significant supply disruptions and soaring jet fuel prices, prompting major Asia-Pacific airlines to hike fares. With fuel costs nearly doubling and further increases expected, the market impact is high, and airlines are warning of continued strain on operating economics. The full effects of these changes may unfold over the next several months.