Factbox-Airlines tackle fuel cost surge with price hikes, outlook cuts
Airlines' Responses to Jet Fuel Price Surge
May 15 (Reuters) - A surge in jet fuel prices from $85-$90 to $150-$200 per barrel amid the U.S.-Israeli war against Iran has blindsided the aviation industry, where fuel accounts for up to a quarter of operating expenses, forcing airlines to raise fares and revise financial outlooks.
Below is a list of how airlines are responding, in alphabetical order:
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.
AIRASIA X
Flight Suspensions
The Malaysian carrier said it would suspend services on routes between Melbourne and Denpasar and Adelaide and Denpasar from June 18 due to increased fuel prices.
Capacity and Surcharge Adjustments
Executives previously said the airline had cut 10% of flights and introduced a surcharge of about 20% on fuel.
AIR CANADA
Guidance Suspension
Canada's largest carrier has suspended its full-year guidance due to fuel price volatility.
Flight Reductions
It had previously announced plans to trim four of its 38 daily flights to New York due to higher fuel prices.
AIR CHINA, CHINA SOUTHERN AIRLINES, REGIONAL CHINESE CARRIERS
Domestic Fuel Surcharge Increases
Chinese airlines will raise fuel surcharges for domestic flights from May 16, with surcharges for domestic flights of 800 km (500 miles) or less to rise by 30 to 90 yuan ($4 to $13). For longer domestic routes, surcharges will increase by 50 to 170 yuan.
AIR FRANCE-KLM
Fuel Bill and Capacity Outlook
The airline group expects a $2.4 billion increase in its fuel bill this year. It downgraded its full-year capacity outlook to an increase of 2% to 4%, having previously guided for 3% to 5% growth.
Ticket Price Increases
It earlier announced plans to increase long-haul ticket prices to address surging fuel costs, with cabin fares set to rise by 50 euros ($58) per round trip.
KLM Flight Cancellations
The group's Dutch arm KLM said on April 16 it would cancel 160 flights in Europe in the coming month due to rising fuel costs.
AIR INDIA
International Flight Cuts
The Indian carrier will temporarily cut flights on several international routes between June and August.
Cost-Cutting Measures
Bloomberg News previously reported the airline had discussed furloughing non-technical employees and cutting flight capacity by more than 20% for the next three months.
Fuel Surcharge Revisions
Air India also 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 fuel prices.
AIR NEW ZEALAND
Financial Outlook and Capital Spending
The New Zealand-based airline forecast its largest pre-tax annual loss in four years and said it would review its capital spending plans and the timing of aircraft deliveries to better align with demand and market conditions.
Fare Hikes and Capacity Consolidation
The carrier has hiked fares and consolidated capacity thrice, having been one of the first to announce broad increases to ticket prices when the conflict broke out. It warned there could be further capacity consolidation if fuel prices stay high.
AIR TRANSAT
Capacity Reductions
The Canadian airline said it would reduce planned capacity by 6% from May to October this year, with cuts expected on routes to Europe and the Caribbean, and with its service to Cuba remaining suspended until October.
AKASA AIR
Fuel Surcharge Introduction
India's Akasa Air introduced a fuel surcharge ranging between 199 and 1,300 Indian rupees ($2 to $14) on domestic and international flights.
ALASKA AIR
Debt Offering
The U.S. airline launched a $500 million debt offering as the sharp rise in fuel prices puts pressure on margins.
Profit Forecast Withdrawal and Capacity Trims
The carrier previously withdrew its full-year profit forecast and warned of a steep hit to second-quarter earnings. It has also trimmed capacity in some markets.
AMERICAN AIRLINES
Profit Forecast and Fuel Bill
The U.S. carrier slashed its 2026 profit forecast, pushing the lower end of expectations to a loss, and said it expected the jet fuel bill to increase by more than $4 billion this year.
Baggage Fee Increases and Benefit Cuts
It has hiked checked baggage fees by $10 each for the first and second bags and by $150 for the third bag on domestic and short-haul international flights, and trimmed certain benefits for economy passengers.
ANA
Cost Impact and Hedging
The Japanese airline said higher fuel prices would lift costs by about 140 billion yen ($883 million) this year, though hedging, fares and cost cuts are expected to limit the impact to around 60 billion yen. It is also considering a domestic fuel surcharge for the financial year starting in April 2027.
ASIANA AIRLINES
Flight Reductions
The South Korean airline will slash 22 flights between April and July due to the fuel cost increase, Newsis reported.
CATHAY PACIFIC
Fuel Surcharge Adjustments
The Hong Kong airline will lower fuel surcharges for most passenger flights from May 16 as part of an "agile response" to the volatility of jet fuel prices, it said.
CEBU AIR
Fare Adjustments and Surcharges
The Philippines-based airline said it had implemented fare adjustments and surcharges across parts of its network in response to fuel price pressures.
DELTA AIR LINES
Capacity Cuts and Fee Increases
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 jet fuel costs, with an increase of $10 on first and second checked bags and a $50 increase on the third.
Profit Forecast
The U.S. airline pulled all planned capacity growth for the second quarter and forecast profit below Wall Street expectations.
EASYJET
Profit Warning
EasyJet warned of a bigger half-year pre-tax loss of 540-560 million pounds ($721-748 million), including 25 million pounds in extra fuel costs in March.
FRONTIER AIRLINES
Relief Plan Proposal
A group of U.S. budget airlines including Frontier has pitched a $2.5 billion relief plan to the U.S. government, the Wall Street Journal reported. The figure is based on how much more the group expects to pay for jet fuel this year compared to earlier forecasts, the report said.
Forecast Review
The carrier has said it is reviewing its full-year forecast as fuel prices have increased signifi
