Airlines across the Asia-Pacific region are raising ticket prices as soaring jet fuel costs, triggered by escalating tensions in the Middle East, place fresh pressure on the aviation sector.
Major carriers, including Qantas, Air India, and Cathay Pacific, have either implemented fare increases or indicated plans to do so in response to the spike in fuel prices.
According to the Platts index, the global benchmark for aviation fuel climbed to $173.91 per barrel on Monday — nearly double the level recorded in January and significantly higher than crude oil prices. Industry experts note that the increase reflects both rising refining costs and the fact that aviation kerosene is often prioritized lower than petrol or diesel in production, as highlighted by the International Air Transport Association (IATA).
The surge has been largely driven by disruptions to oil shipments through the Strait of Hormuz, a key corridor that normally carries nearly 20 percent of the world’s oil supply. Asian economies are especially affected, given that more than 80 percent of the oil and gas transported through the strait is destined for regional markets, according to the U.S. Energy Information Administration.
Air India stated that the rise in aviation turbine fuel (ATF) prices, which account for nearly 40 percent of operating costs, is straining airline finances. “Since early March 2026, ATF has seen significant price escalation due to supply interruptions,” the airline said, announcing new surcharges for passengers.
The carrier also warned that high local taxes on ATF, including excise duty and value-added tax (VAT) in major Indian cities such as Delhi and Mumbai, are exacerbating the financial pressures on operators.
Aviation analysts say the fuel-driven fare hikes could impact passenger traffic and the broader economic recovery in the Asia-Pacific region. Dr. Sunita Rao, an aviation economist, noted, “Airlines are caught in a difficult position. Passing costs to passengers is inevitable, but excessive fare increases could suppress demand and slow the rebound of air travel after pandemic disruptions.”
IATA spokesperson David Lim added, “The current spike in jet fuel highlights vulnerabilities in global supply chains. Airlines, particularly in Asia, must adopt strategies to hedge fuel costs while governments need to ensure tax structures do not further amplify financial stress.”
Passengers are being urged to expect higher airfares in the coming weeks as carriers adjust pricing to reflect the ongoing volatility in global energy markets. The situation underscores the interconnectedness of geopolitical tensions and the aviation industry’s operational costs, with ripple effects on tourism, trade, and regional mobility.