Airlines Raise Fares and Cut Flights as Jet Fuel Costs Surge from Middle East War

Airlines worldwide are raising fares and canceling flights due to surging jet fuel prices stemming from the war in Iran and the Middle East. The conflict has led to the closure of the Strait of Hormuz, doubling jet fuel costs since the start of the year.

Major U.S. carriers, including United, American, Delta, and Southwest, are passing these costs to consumers, with average fares up 20% per mile compared to last year. Thousands of European flights have been canceled, and airlines serving the UK, such as KLM, Air Canada, Asiana Airlines, Delta, Lufthansa, and SAS, plan to operate fewer flights.

In contrast, British Airways owner IAG, EasyJet, and Jet2Holidays have stated they do not plan to change schedules. Long-haul routes, like London to Melbourne, have seen fares rise 76%, and London to Hong Kong up 72%.

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Airlines cut its 2026 earnings forecast, projecting an adjusted per-share loss of up to 40 cents or earnings of $1.10, down from a prior estimate of $1.70 to $2.70. The carrier reported a first-quarter net loss of $382 million, with revenue up 10.8% to $13.91 billion.

Delta faces $2 billion in increased fuel costs for the current quarter alone. The four largest U.S. carriers spent a combined $100 million daily on fuel last year, now paying billions more. Southwest's Chief Operating Officer Andrew Watterson noted five industrywide fare hikes this year, with more expected.

Airlines have recovered only a portion of increased costs through fare increases. United has reduced its schedule by 5% through September, cutting less profitable flights to boost average ticket prices. Spirit Airlines, which has filed for bankruptcy twice in the last two years, warned in March it could go out of business, though the Trump administration is considering a bailout or purchase to keep it afloat.

Strong travel demand persists despite higher prices, with summer bookings remaining robust. American Airlines CEO Robert Isom stated customers are willing to pay more for amenities like extra legroom. Airlines are cutting bargain fares on less profitable routes, lifting overall prices.

Midweek or redeye flights remain cheaper than peak times, but competition influences pricing, with popular long-haul routes often cheaper per mile than shorter ones. If low-cost carriers like Spirit shrink or fail, larger airlines could maintain higher fares longer.

Other discount airlines are also struggling amid the fuel cost surge.

In the UK, airlines including British Airways, easyJet, Ryanair, Virgin, TUI, and Jet2 are lobbying the government to relax noise rules, cut flight taxes, suspend the emissions trading scheme, and modify passenger compensation rights. They seek to classify fuel-related disruptions as extraordinary circumstances, limiting payouts for cancellations or delays.

The trade body Airlines UK submitted these demands, warning of further flight cuts and fare increases if fuel supply issues persist. Potential jet fuel shortages by summer could affect holiday plans if the conflict continues. Public criticism has emerged, with Rep.

Ritchie Torres sending a letter to United's CEO Scott Kirby, stating United plans to retain fuel savings rather than pass them to passengers. " — Rep. However, in cases of war or extraordinary circumstances, additional compensation may not apply. For package holidays, tour operators can add up to 8% for significant fuel cost rises, though many are promising not to this year.

Travel experts advise booking insurance covering disruptions and maintaining flexibility in plans. California's jet fuel stockpile has hit a two-year low, raising concerns for summer travel in the region. Italian energy major Eni reported first-quarter adjusted net profit of €1.3 billion, below expectations, but raised its 2026 share buyback to €2.8 billion and lifted cash flow guidance to €13.8 billion.