Airlines worldwide are adjusting ticket prices and scaling back flight capacity in response to a sudden spike in oil prices, a shift that could test the industry’s profitability if higher travel costs discourage passengers.

Prior to the escalation of the U.S.-Israeli conflict involving Iran last month, the aviation sector had projected record profits of $41 billion for 2026. However, a sharp increase in jet fuel costs—reportedly doubling in recent weeks—has disrupted those expectations, prompting carriers to reassess their operations and route networks.

Major airlines, including United Airlines, Air New Zealand, and Scandinavian Airlines, have already announced capacity reductions alongside fare increases. Others have introduced or expanded fuel surcharges to offset rising expenses.

Industry experts warn that airlines are facing conflicting pressures. Rigas Doganis, former head of Olympic Airways and a past director at easyJet, described the situation as a “perfect storm,” noting that carriers may need to lower fares to stimulate weakening demand even as higher fuel costs push them in the opposite direction.

The sector had enjoyed a strong recovery in 2025, with global passenger traffic reaching levels approximately 9% above those seen before the COVID-19 pandemic. Robust demand and supply-chain constraints, particularly delays in aircraft deliveries, had allowed airlines to maintain high seat occupancy and exert pricing power.

However, the scale of fare increases required to offset fuel costs could prove challenging, especially as households face higher gasoline prices that may limit discretionary spending on travel.

Analysts suggest capacity reductions may be the primary tool airlines use to support pricing. Andrew Lobbenberg, head of European transport equity research at Barclays, said cutting available seats is often the most effective way to drive fares higher during periods of crisis.

Airlines have already begun signaling the extent of potential fare hikes. The chief executive of United Airlines, Scott Kirby, recently indicated ticket prices may need to rise by around 20% to cover fuel costs.

Meanwhile, Cathay Pacific has increased fuel surcharges twice in the past month. From Wednesday, passengers flying return economy routes between Sydney and London will face an additional $800 surcharge, compared to a typical pre-crisis fare of about A$2,000 ($1,369.60).

Low-cost carriers are expected to be particularly vulnerable, as their customer base tends to be more sensitive to price increases. Analysts note that some travelers may shift to alternative transport options, such as rail or bus services, especially for short-haul journeys.

The current পরিস্থিত represents the fourth major oil shock for the aviation industry since the early 2000s. Previous disruptions occurred during the 2007–2008 pre-financial crisis period, following the Arab Spring in 2011, and after the outbreak of the Russia-Ukraine war in 2022.

This time, additional concerns have emerged over fuel supply security, particularly due to the closure of the Strait of Hormuz, a critical energy transit route. Airlines such as Vietnam Airlines have raised concerns about access to physical fuel supplies.

While airlines have sought to improve efficiency by modernizing fleets, supply-chain disruptions and technical issues with next-generation aircraft engines have delayed deliveries, limiting their ability to reduce fuel consumption.

Industry consolidation in the United States over the past decade has also reshaped the sector, with mergers such as Delta-Northwest and American Airlines-US Airways reducing the number of major carriers and enabling tighter capacity management. Meanwhile, low-cost operators like Ryanair and IndiGo have focused on streamlined fleets and rapid turnaround times to control costs.

According to aviation consultancy IBA, the current crisis is likely to widen the gap between stronger and weaker airlines. Companies with solid financial reserves and access to capital are expected to better withstand prolonged cost pressures, while those with weaker balance sheets may face growing financial strain.

Source: ZAWYA

Gulf Air has announced the continuation of its temporary network via Dammam, extending operations to various international destinations through April 2026. Travel arrangements between Bahrain and Dammam will be provided for confirmed passengers.

Gulf Air has confirmed that its temporary Dammam network will continue operating through April 2026. Key extensions include:

• Paris (CDG): Operations extended until 5 April 2026
• London Heathrow (LHR): Operations extended until 11 April 2026
• Mumbai (BOM), Nairobi (NBO), Cairo (CAI), Chennai (MAA), Bangkok (BKK), Manila (MNL), Casablanca (CMN), Frankfurt (FRA): Operations extended until 30 April 2026

Passengers with confirmed bookings will be provided transportation between Bahrain and Dammam. Gulf Air will also facilitate Saudi transit visas for travelers connecting to Saudi Arabia via the airline’s arranged land transportation. Passengers whose final destination is Saudi Arabia are required to hold a valid visa independently.

Gulf Air advises passengers not to proceed to their departure station without a confirmed ticket. Flights to and from Bahrain International Airport remain temporarily suspended.

Spain has prohibited United States military aircraft involved in the ongoing Iran conflict from using its airspace, a move that highlights growing friction between Washington and European allies.

Defence Minister Margarita Robles confirmed that neither Spanish military bases nor national airspace would be available for operations connected to the war. She described the conflict, initiated by the US and Israel about a month ago, as both “illegal” and “unjust,” reaffirming Madrid’s firm opposition.

The decision reinforces Spain’s position as one of Europe’s most vocal critics of the conflict and is expected to further strain relations with the administration of Donald Trump. Trump had earlier warned of a potential full trade embargo against Spain in response to its stance.

Spanish officials had already indicated that jointly operated US-Spain military bases would not be used in the campaign. Foreign Minister José Manuel Albares said the latest restriction aims to avoid contributing to any escalation.

Meanwhile, the White House suggested on Monday that the conflict could conclude within two weeks, provided Iran agrees to negotiations, warning that failure to do so would result in serious consequences.

Source: The Telegraph

Airlines across the globe are cancelling thousands of flights as the ongoing conflict in Iran pushes jet fuel prices to unprecedented levels, intensifying pressure on the aviation sector.

Data from aviation analytics firm Cirium shows that nearly one in every 20 scheduled flights was cancelled on Monday. This represents a sharp increase compared with the same period last year, reflecting growing strain on airline operations.

The surge in cancellations follows a dramatic rise in fuel costs. Jet fuel prices, which stood at $742 per metric tonne a year ago, have climbed beyond $1,710. The escalation is largely linked to supply disruptions caused by the closure of the Strait of Hormuz, a critical route responsible for transporting roughly one-fifth of the world’s oil.

Crude oil markets have also reacted strongly, with Brent crude prices reaching as high as $116 per barrel during early trading on Monday. Analysts warn that refining jet fuel requires more crude oil than petrol or diesel, amplifying the impact of supply constraints on aviation fuel availability.

Concerns are now shifting from price increases to potential shortages. According to a report by the Financial Times, the United Kingdom is expected to receive its final known shipment of jet fuel from the Middle East this week.

Aviation analyst Alex Macheras cautioned that multiple markets could face severe fuel shortages within days, including major European airport hubs. He indicated that some airports have begun advising airlines to prepare for scenarios where fuel may not be available.

The disruption is not confined to Europe. Airlines across Asia, Africa, and South America are implementing contingency plans, including additional refuelling stops, as the supply situation deteriorates.

Several carriers have already announced capacity reductions. Air New Zealand has cut 1,100 flights through early May, while Scandinavian airline group SAS plans to cancel 1,000 flights next month, primarily affecting domestic routes.

Meanwhile, Vietnam Airlines has warned it may reduce monthly flights by 10 to 20 percent next quarter if jet fuel prices reach between $160 and $200 per barrel. This could impact up to 18 percent of its international services and more than a quarter of its domestic operations.

In the United States, United Airlines has already reduced capacity by approximately 5 percent on less profitable routes, becoming the first major US carrier to take such measures in response to rising fuel costs.

Chief executive Scott Kirby said sustained high oil prices could increase the airline’s expenses by $11 billion, potentially forcing ticket prices to rise by around 20 percent to maintain profitability. He noted that fares have already increased by 15 to 20 percent in recent weeks, warning that higher prices are likely to dampen travel demand.

Kirby added that in a worst-case scenario, oil prices could climb to $175 per barrel and remain above $100 through 2027.

Beyond fuel-related challenges, the conflict has also disrupted travel across the Middle East. Major European carriers, including British Airways, Air France-KLM, and Lufthansa, have suspended multiple routes to and from the region.

Cirium data indicates that approximately 7,049 out of 104,618 scheduled flights—around 7 percent—were cancelled globally on Monday. By comparison, 4,797 out of 102,132 flights, or 4.7 percent, were cancelled on the same day last year.

The impact has been particularly severe in North America, where cancellations reached 14.6 percent of departing flights, significantly higher than the 4.4 percent recorded a year earlier.

Source: The Telegraph

Airfares from the United Arab Emirates have increased significantly in recent weeks, with travel agencies reporting average rises of 15 to 25 per cent. The surge is being linked to reduced flight schedules by regional carriers, a decline in international airline operations on key routes, and mounting operational expenses such as fuel and insurance.

Industry professionals say the price increase, while noticeable, has not dampened overall travel demand. Instead, it has led to changes in how passengers plan their journeys. Imtiaz Hussain Nasir, chief executive of Pinoy Tourism, noted that travellers are now more price-conscious, often comparing options carefully and booking earlier to avoid further increases. Flexibility with travel dates and routes has also become more common.

Recent travel disruptions have played a role in shaping demand patterns. Many passengers postponed trips rather than cancelling them, leading to a rebound in bookings as services resumed. This combination of delayed and new demand has placed additional pressure on available seats, contributing to higher fares.

Rashida Zahid, vice president of operations at musafir.com, said travellers are increasingly adopting strategic booking habits. According to her, most passengers now secure tickets around eight to ten days before departure, as prices tend to rise sharply within the final few days. While direct flights remain the preferred choice, more travellers are opting for indirect routes when the cost savings are substantial.

The limited presence of international carriers is another factor influencing prices. Rino Steephen, sales manager and partner at Azzam Travel and Tourism, explained that a large share of current flights is being operated by UAE-based airlines such as Emirates, Etihad, and Air India. Reduced competition, he said, is contributing to higher ticket costs.

Popular outbound destinations from the UAE include India, the Philippines, several African nations, Turkey, Thailand, Georgia, Armenia, Malaysia, Singapore, and major European cities such as London, Paris, Milan, and Barcelona.

Flight availability continues to play a critical role in pricing. With fewer direct options, many travellers are choosing longer, indirect journeys, sometimes at higher overall costs, to reach their destinations while managing budgets.

Experts also point to broader global pressures affecting the aviation sector, including rising fuel prices, increased insurance premiums, and operational risks. These factors are feeding into ticket pricing worldwide.

Despite higher fares, booking patterns vary depending on urgency. Some passengers continue to book immediately due to pressing travel needs, while others plan weeks in advance to secure more favourable rates. Airlines, meanwhile, are offering greater flexibility in ticket changes and cancellations to accommodate shifting travel plans.

Looking ahead, industry observers expect demand to remain strong. Nasir said travel activity is likely to recover steadily as operations stabilise, although fares may stay elevated on high-demand routes with limited capacity. Steephen added that while UAE carriers are operating without seat restrictions, the absence of more international airlines continues to shape pricing trends. Any easing of fares, he noted, will depend on how conditions evolve in the coming weeks.

Source: Khaleej Times

Qatar Airways has announced temporary delays in handling customer service requests, including refunds, citing a significant rise in demand. The airline said response and processing times may be longer than usual, while teams continue to work continuously to address all pending cases.

Under updated guidance, passengers holding confirmed bookings for travel between 28 February and 15 June 2026 are eligible to request either a full refund or a change of travel dates.

For customers with cancelled bookings, the airline clarified that if a booking cannot be retrieved through its system, it is likely already undergoing refund processing, and no further action is required. However, if the booking remains accessible, passengers may apply for a full refund or modify their travel dates. Any additional services purchased alongside tickets will be refunded separately after the main ticket refund is completed.

Passengers who still intend to travel can reschedule their journeys on Qatar Airways-operated flights up to 31 October 2026, subject to seat availability and fare conditions.

The airline noted that refunds will be issued to the original form of payment and may take up to 28 working days to complete. Customers can monitor the progress of their refund requests through the airline’s online tracking system.

For tickets booked through travel agents or third-party platforms, passengers have been advised to contact their original point of purchase to initiate refund requests.

Qatar Airways also directed customers to its official website for further assistance and updated information, including frequently asked questions.