Airlines start vast fare hikes; shares stabilize

AIR NEW Zealand said on Tuesday it has raised all of its fares due to the Middle East conflict and may take further pricing action, underscoring how global airlines will seek to pass on the costs of higher oil prices to passengers.

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Jet fuel prices, which were around $85 to $90 per barrel prior to the conflict, have increased sharply to between $150 and $200 per barrel in recent days, New Zealand’s flag carrier said, adding it was suspending its financial outlook for 2026 due to uncertainty over the conflict.

The US-Israeli war on Iran has sent oil prices surging, upending global travel and sparking fears of a deep travel slump and the potential for the widespread grounding of planes.

In an emailed response to Reuters, Air New Zealand said it had raised one-way economy fares by NZ$10 ($5.92) on domestic routes, NZ$20 on short-haul international services and NZ$90 on long-haul flights.

While airfares have spiked on Asia-Europe routes due to airspace closures and capacity constraints, Air New Zealand is one of the first airlines to announce broad increases to ticket prices since the start of the war.

“Tf the conflict leads to continued elevated jet fuel costs, we may need to take further pricing action and adjust our network and schedule as required,” the carrier said.