Global Airlines Hike Fares, Cut Routes as Fuel Costs Balloon

• Global ​airlines sounded the alarm over soaring jet fuel prices triggered by the U.S.-Israeli war against Iran, warning of hundreds of ‌millions of extra costs, higher fares and cuts to some routes.
• Delta Air Lines Chief Executive Ed Bastian said the dramatic run-up in jet fuel prices had increased the airline's costs by as much as $400 million in March alone. The industry is moving quickly to pass on higher expenses through fare hikes, he told a J.P. Morgan industrials conference.
• The war, now in its third ​week, has thrown global aviation into turmoil, with flights cancelled, rescheduled or rerouted as most Middle East airspace remains closed amid fears of missile and ​drone attacks.
• Jet fuel prices have emerged as a major challenge, pushing up operating costs, with European prices doubling and Asian prices up almost 80% since the start of U.S. and Israeli strikes on Iran in late February. Fuel is the industry's second-largest expense after labour, typically accounting for a fifth to a quarter of operating costs. U.S. airlines ​largely stopped hedging fuel in the past two decades, and Scandinavian Airlines (SAS) said last year it had not hedged any of its fuel consumption for the ​following 12 months.
• The United Arab Emirates briefly closed its airspace on Tuesday in response to incoming missile and drone threats from Iran, the second straight day of disruption after a drone caused a fire near Dubai airport on Monday
• The mounting cost warnings show ⁠how the shockwaves from the conflict are spreading far beyond the Middle East as airlines navigate their biggest crisis since the COVID pandemic. Delta's Bastian said the carrier is well-positioned to recover fuel costs and can adjust ​capacity if elevated prices persist. Still, airlines will need to tread carefully with fare hikes at a time ​of fragile consumer confidence.

 (Source: Reuters)