Factbox-Price Hikes, Outlook Cuts - What Airlines Are Doing as Fuel Costs Surge

How Airlines Are Responding to Surging Fuel Costs and Price Increases

Airlines' Strategies for Managing Rising Jet Fuel Prices

April 10 (Reuters) - A surge in jet fuel prices driven by the U.S.-Israeli war on Iran has upended the global aviation industry, forcing airlines to raise fares and revise financial outlooks.

Jet fuel prices have soared from $85 to $90 per barrel to $150 to $200 per barrel in recent weeks, a financial hit for an industry where fuel accounts for up to a quarter of operating expenses.

Below is a list of how airlines are responding, in alphabetical order:

Airlines' Responses by Region

Europe and Middle East

AEGEAN AIRLINES

The Greek airline expects suspended Middle East flights and a spike in fuel prices to have a "notable impact" on its first-quarter results.

AIR FRANCE-KLM

The airline group said it planned to increase long-haul ticket prices to address surging fuel costs, with cabin fares set to rise by 50 euros ($58) per round trip.

IAG

British Airways-owner IAG said on March 10 it did not plan to increase ticket prices immediately, as it has hedged much of its fuel for the short- to medium-term.

SAS

Th

Asia-Pacific

AIRASIA X

The Malaysian airline's executives said the company had cut 10% of flights across the group, with a surcharge of about 20% on fuel in general.

AIR INDIA

The Indian flag carrier said it would revise its fuel surcharge from a flat domestic surcharge to a distance-based grid. It said surcharges on international routes did not compensate for the exponential rise in jet fuel prices.

AIR NEW ZEALAND

The airline said on April 7 it would slash flights through May and June and hike fares, having been one of the first to announce broad increases to ticket prices when the conflict broke out. It also suspended its full-year earnings forecast due to fuel market volatility.

AKASA AIR

India's Akasa Air said it was introducing a fuel surcharge ranging between 199 and 1,300 Indian rupees ($2 to $14) on domestic and international flights.

CATHAY PACIFIC

The Hong Kong airline said it would hike its fuel surcharge by 34% across routes from April 1 and review them every two weeks. The carrier's CEO said it would maintain flight capacity despite the high fuel prices, but that its 10% passenger capacity growth plan could change if demand declines due to high fuel prices.

CEBU AIR

The Philippines-based airline said the sharp rise in fuel prices was a key concern and it would continue to review its pricing and network strategies to mitigate the impact.

CHINA EASTERN AIRLINES

The airline said it would raise fuel surcharges for domestic flights from April 5, with flights of 800km and below hit with a 60 yuan ($9) surcharge and a 120 yuan surcharge for flights over 800km.

GREATER BAY AIRLINES

The Hong Kong-based company said it would raise fuel surcharges on most routes from April 1, while keeping them unchanged on mainland China and Japan routes.

Its surcharge for flights between Hong Kong and the Philippines will more than double, the carrier said.

HONG KONG AIRLINES

The airline said it would raise fuel surcharges by up to 35% from March 12, with the sharpest increase on flights between Hong Kong and the Maldives, Bangladesh and Nepal, where charges would rise to HK$384 ($49) from HK$284.

INDIGO

India's biggest airline said it would introduce fuel charges on domestic and international flights from March 14, including a charge of 900 rupees for flights to the Middle East and a charge of 2,300 rupees for flights to Europe.

The company is also lobbying the Indian government to cut fuel taxes, sources told Reuters.

KOREAN AIR

The South Korean flag carrier will enter emergency management mode from April, as rising oil prices weigh on costs, a source with knowledge of the matter told Reuters. The airline plans to implement phased response measures based on oil price levels, and step up company-wide cost efficiency to offset surging fuel costs.

PAKISTAN INTERNATIONAL AIRLINES

The carrier said it would raise domestic flight fares by $20 and international fares by up to $100, citing higher fuel surcharges.

Americas

ALASKA AIR

The U.S. airline said it would increase fees for the first checked bag by $5 and by $10 for the second on its North American flights, as well as for its Hawaiian Airlines unit. It hiked prices for a third checked bag from $50 to $200.

AMERICAN AIRLINES

The U.S. carrier said it would hike checked baggage fees by $10 each for the first and second checked bags and by $150 for the third checked bag on domestic and short-haul international flights. The airline also trimmed certain benefits for economy passengers.

It had earlier said it expected a $400 million increase in first-quarter expenses due to the fuel prices.

DELTA AIR LINES

Delta said it would cut capacity by around 3.5 percentage points from its original plan and raise fees for checked bags in an attempt to offset soaring jet fuel costs, with an increase of $10 on the price of first and second checked bags and a $50 increase on the third checked bag.

The U.S. airline pulled all planned capacity growth for the current quarter and forecast profit below Wall Street expectations. Delta CEO said it would hold off on updating the full-year outlook given uncertainty over how long the fuel price spike would last.

EASYJET

EasyJet CEO Kenton Jarvis said European consumers should expect higher ticket prices towards the end of summer, when existing fuel hedges come to an end.

FRONTIER AIRLINES

The U.S. airline is reviewing its full-year forecast as fuel prices have increased significantly since it issued the outlook.

JETBLUE AIRWAYS

The U.S.-based low-cost carrier said it was increasing fees for optional services such as checked baggage as it experiences "rising operating costs". Baggage prices will rise by either $4 or $9, it said.