The price of kerosene has risen by 90% in just six weeks. From $2.07 a gallon at the beginning of the year to $3.93 on March 10, according to the Argus US Jet Fuel Index — and the trajectory shows no signs of reversing as long as the Strait of Hormuz remains blocked (despite the partial reopening reported in recent days). In the coming months, anyone who needs to buy a plane ticket will have to deal with this reality, hoping for a rapid conclusion to the conflict.
As reported by Bloomberg, the director general of IATA (an acronym that stands for International Air Transport Association, the international airline association) Willie Walsh, estimated that the cost of tickets could rise up to 9% — a figure that represents the global average, and therefore already incorporates less exposed routes and companies better covered by hedging contracts. Real-time data from the IATA Jet Fuel Price Monitor illustrates the extent of the shock: in the week following the outbreak of the conflict, the global average price of kerosene rose by 58.4%, in just seven days. In the most vulnerable market segments, ticket numbers are much higher.
Deutsche Bank data
An analysis conducted by Deutsche Bank — by analyst Michael Linenberg — of ticket prices for late-March flights in the United States found increases of between 15% and 124% compared to fares before the conflict broke out. In the first week of the war, fares for advance purchase transcontinental flights more than doubled; those to the Caribbean grew by 58%, while flights to Florida saw a 43% increase, according to Axios.com, which cites the same Deutsche Bank analysis.
The increases for the various companies
Cathay Pacific CEO Ronald Lam said that in the first part of March the cost of fuel doubled compared to the average of the previous two months. The company has officially updated its fuel surcharges starting March 18: on long haul routes the item increases from $72.90 to $149.20 each way. AirAsia and AirIndia have announced a temporary increase in fares and fuel surcharges,
Air New Zealand has suspended its financial forecast for 2026, reporting that fuel prices have risen from between $85 and $90 a barrel before the attacks to between $150 and $200, Al Jazeera reported. The New Zealand company has introduced differentiated increases: 10 New Zealand dollars each way on domestic routes, 20 on short-haul international routes and 90 on intercontinental routes. Hong Kong Airlines has raised fuel surcharges by up to 35.2%, with the steepest increases on routes to the Maldives, Bangladesh and Nepal.
Thai Airways is aiming for a price increase of between 10% and 15%, with CFO Cherdchom Therdthirasak urging passengers in a meeting with investors to buy tickets before prices rise further, Fortune reported. Increases also for AirAsia and Air India.
The structure of the problem: surcharge or base rate?
European and Asian carriers tend to apply separate fuel surcharges, which is visible on the ticket slip. The large American airlines — United, Delta, Southwest, American — instead incorporate fuel costs into the base fare: any increase ends up directly in the ticket price, without a dedicated line, as CNBC explains.
Fuel accounts for about 30% of an airline’s operating costs, according to Deutsche Bank. The closure of the Strait of Hormuz — which normally handles 20% of the world’s oil supply — is at the root of the surge. The US/Israel/Iran conflict has already caused the cancellation of almost 50,000 flights since the start of military operations on February 28, according to the aviation analysis company Cirium, cited by CNN. The squeeze on supply on alternative routes — those that avoid Middle Eastern airspace — fuels a second wave of price pressure, independent of the cost of kerosene.
Estimates for the summer
United Airlines CEO Scott Kirby warned that there will be an impact on first-quarter results and, if the war and the closure of the Strait continue, also on the second quarter, as reported by NPR. UBS analysts observed that the context, with companies starting from optimistic forecasts on demand, is favorable for the transfer of increases to passengers.
If you plan to book a flight for the next few months, keep in mind the advice of experts cited by CNBC, CBS News and Fortune, all converging on a single point: buy now, because every extra week of conflict — and closed Straits — will only increase prices.
