Aviation markets are reeling from a sharp supply shock driven by the escalating conflict between Israel and Iran. Oil prices have surged, forcing major carriers to implement drastic cost-saving measures immediately.
Cathay Pacific Chief Executive Ronald Lam disclosed fuel costs have doubled this month compared to the previous quarter. The carrier is updating surcharges across all routes effective March 18. Air New Zealand similarly adjusted pricing structures, raising long-haul economy fares significantly.
Capacity reductions are widespread. SAS announced cancellations of approximately one thousand flights in April. Air New Zealand cut services by five percent, affecting roughly forty-four thousand travelers. European carriers including Lufthansa and KLM have suspended operations to Tel Aviv and Dubai.
Experts predict elevated ticket prices will persist for months. Demand continues shifting toward alternative routes bypassing the Middle East, further straining available capacity and driving rates higher.