Iran war raises jet fuel costs and cuts flights to Southeast Asia

Higher jet fuel prices and flight cancellations tied to the Iran war are reducing visitor arrivals in Cambodia, Thailand, Vietnam and neighboring countries ahead of the summer peak season. Airlines including Vietnam Airlines, AirAsia and Cathay Pacific have cut routes or raised fuel surcharges after airspace restrictions and longer detours increased operating costs.

Cathay Pacific raised its medium-haul fuel surcharge to $80 from $34 and its long-haul surcharge to $174 from $73.

Tourism revenue at risk Tourism accounts for nearly 13 percent of Thailand's gross domestic product and nearly 9 percent of Vietnam's, while supporting millions of jobs across Cambodia. International visitor numbers to Thailand fell 7 percent year-on-year in April, with European arrivals down 16 percent and Middle Eastern arrivals down 57 percent.

In Siem Reap, Cambodia, recorded visitors dropped 37.5 percent in the first four months of 2026 compared with the same period last year. A local restaurant owner reported that higher liquefied petroleum gas prices have reduced profit margins and made it harder to cover staff wages for 14 employees.

Travelers and workers adjust A Washington-area travel writer canceled plans for a Thailand trip after checking airfares in March. A Siem Reap rickshaw driver said daily earnings fell from as much as $20 to about $5, with half of that amount now spent on fuel.

An energy consultant in Bangkok said the combination of the pandemic and the current conflict has created severe pressure on tourism businesses that rely on returning visitors for survival.