Finance
Air new Zealand to cut flights as fuel price surge wreaks havoc on travel
Published by Global Banking & Finance Review®
Posted on March 12, 2026
3 min readLast updated: March 12, 2026
Quick Summary
Air New Zealand is trimming approximately 5% of its flights—around 1,100 services through early May—impacting some 44,000 customers amid a sharp jet fuel price surge fueled by the Iran war and disruptions in the Middle East.
Air New Zealand Slashes Over 1,100 Flights as Jet Fuel Prices Surge Worldwide
By Lucy Craymer
Impact of Global Jet Fuel Price Surge on Airlines
WELLINGTON, March 12 (Reuters) - Air New Zealand said on Thursday it would slash 5% of its flights, or around 1,100 services, through early May as the Iran war sends jet fuel prices surging and disrupts travel even in rural areas thousands of miles from the conflict zone.
Airfare Hikes and Industry Response
The New Zealand carrier led other airlines including Australia's Qantas Airways, Scandinavia's SAS and Thai Airways in announcing airfare hikes this week, blaming an abrupt spike in the cost of fuel that has rattled the global aviation sector.
Flight Cancellations and Route Adjustments
The Middle Eastern conflict has forced many airlines to cancel flights to and from the region or use alternative routes due to drone and missile fire that has severely curtailed airspace and caused the biggest aviation industry crisis since the pandemic.
Oil Price Surge and Global Supply Disruptions
Oil prices climbed on Thursday after Iraqi security officials said Iranian explosive-laden boats had hit two fuel oil tankers amid other global supply disruptions and Iran said the world should be ready for oil at $200 a barrel.
Effects on Air New Zealand and Passengers
Air New Zealand CEO Nikhil Ravishankar told state-owned Radio New Zealand that about 44,000 customers of the 1.9 million flying through early May would have to be reaccommodated due to domestic and international flight cuts.
Regional and Long-Haul Flight Impacts
Airports servicing areas such as popular New Zealand winemaking region Marlborough and west coast city New Plymouth will see a reduction in services over the coming weeks.
Fewer long-haul flights would be cut, Ravishankar said, as its U.S. routes have become a more popular stopover on the way to Europe since widespread Middle Eastern airspace closures.
"People want to get to Europe still, and over the U.S. airspace we can get them into Europe, and that's what we're focused on doing," he said.
Broader Airline Market Reactions
Air New Zealand's shares were down 1% on Thursday, in line with drops in Hong Kong's Cathay Pacific, Australia's Qantas Airways and Japan Airlines.
Middle East Airspace Closures and Airline Strategies
On Wednesday, two drones fell near Dubai's main airport - the world's busiest hub for global passengers - and Bahrain evacuated some planes, as attacks on infrastructure across the Gulf continued to wreak havoc on air traffic.
The war has also disrupted shipping via the world's most vital oil export route, sent oil prices surging and upended global travel, pushing airline tickets on some routes sky-high, and sparking fears of a deep travel slump.
Passenger Shifts and Airline Route Changes
Travellers are also scrambling to switch to carriers that avoid Middle East airspace, with Thai Airways saying it was already taking on board more passengers to and from Europe.
Cathay Pacific has cancelled its flights to Dubai and Riyadh through the end of March and is instead adding more services to London and Zurich, taking advantage of a spike in demand for Asia-Europe flights that avoid the Middle East.
Ripple Effects Beyond the Middle East
Highlighting the ripple effects of the conflict beyond the Middle East, the government in Vietnam warned on Wednesday that domestic airlines may be at risk of fuel shortages as soon as next month.
(Reporting by Lucy Cramer in Wellington and Chayut Setboonsarng in Bangkok, Writing by Anne Marie Roantree; Editing by Jamie Freed)
Key Takeaways
- •Air New Zealand will cancel about 1,100 flights (5% of capacity) through early May, affecting an estimated 44,000 passengers (1news.co.nz).
- •The airline cites soaring jet fuel costs driven by the Iran war, Middle East airspace closures, and disruptions like the Strait of Hormuz blockade as primary reasons for the cuts (1news.co.nz).
- •Global oil prices have surged past $100 per barrel—Brent and WTI hitting around $110–114—triggered by escalating conflict and supply fears (thenationalnews.com).
References
Frequently Asked Questions about Air New Zealand to cut flights as fuel price surge wreaks havoc on travel
1Why is Air New Zealand cutting flights?
Air New Zealand is cutting 5% of its flights due to a surge in jet fuel prices caused by the Middle East conflict.
2How many flights will be affected by Air New Zealand's decision?
About 1,100 Air New Zealand flights will be cut, impacting around 44,000 customers through early May.
3Which routes are most affected by the flight cuts?
Domestic routes serving regions like Marlborough and New Plymouth are most affected, while fewer long-haul flights will be cut.
4How is the Middle East conflict affecting global air travel?
The conflict has led to airspace closures, causing airlines to reroute flights, cancel services, and raise airfares globally.
5Are other airlines also raising airfares due to fuel prices?
Yes, airlines like Qantas, SAS, and Thai Airways are increasing ticket prices in response to rising fuel costs.
