Airlines worldwide are raising ticket prices and reducing flights following soaring oil prices, posing a threat to the aviation industry's profits.
The Middle East conflict is driving up oil prices. Airlines worldwide have begun raising ticket prices, reducing flights, and imposing additional fuel surcharges. Analysts warn that if passenger travel decreases, the aviation industry could face another crisis.
On March 30, 2026, at 1:47 PM, Reuters reported that airlines worldwide have begun raising airfares and reducing the number of flights to cope with rapidly rising oil prices. However, the industry's ability to maintain profitability may depend on whether consumers reduce travel, as higher fuel prices are putting pressure on household budgets.
Before the US-Israel-Iran conflict began last month, the aviation industry projected record combined profits of $41,000 billion in 2569. However, the doubling of jet fuel prices has jeopardized that target and forced airlines to adjust their route plans and strategies.
Several airlines, from United Airlines and Air New Zealand to Scandinavia's SAS, have announced reductions in the number of flights and price increases, while some have begun charging additional fuel surcharges.
Aviation industry experts say airlines are facing a major challenge because while rising fuel costs are forcing them to increase ticket prices, demand for travel is trending downwards due to higher living costs. This presents a difficult situation for airlines.
Passenger numbers increased, but costs soared.
Last year, the aviation industry recorded a record high number of global passengers, approximately 9% higher than pre-COVID levels, despite ongoing supply chain issues causing delays in the delivery of new aircraft.
The increased demand for travel after COVID, coupled with the inability to keep up with the supply of new aircraft, has allowed airlines to control seat availability and set higher ticket prices in recent years.
But this price increase for tickets, to offset rising fuel costs, is so large that consumers are already facing higher fuel prices and the cost of living, which may cause people to reduce their spending on travel.
Analysts say the only way airlines can raise ticket prices is by first reducing the number of flights, something that happened during previous oil crises.
Ticket prices may increase sharply.
United Airlines executives have indicated that ticket prices may need to increase by up to 20% to offset higher fuel costs. Cathay Pacific has already raised fuel surcharges twice in the past month, with round-trip flights between Sydney and London now facing an additional $800 in surcharges.
Analysts say low-cost airlines may be the most affected because their customer base is price-sensitive, unlike business or premium passengers who have higher purchasing power.
Some passengers may reduce short-distance trips or switch to trains, buses, or other modes of transportation instead of flying.
A new shock in oil prices for the aviation industry.
This conflict in the Middle East is considered the fourth oil price shock to impact the aviation industry this century, following previous incidents during...
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- 2550-2551, before the global financial crisis.
- 2554, following the Arab Spring.
- 2565, after the Russo-Ukrainian war.
This is also the first time that some airlines have been genuinely concerned about fuel supply due to the closure of the Strait of Hormuz.
Experts say the oil price crisis will widen the gap between strong and weak airlines.
While financially stable airlines, able to set higher ticket prices and access funding, are better able to cope with rising costs, less profitable airlines with limited capital may face increased financial risk.
Reference: www.reuters.com
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