【Iran Crisis】Hong Kong Airlines to increase fuel surcharges by up to 150 yuan per flight starting Thursday; many Asian airlines plan to raise ticket prices or even suspend flights

As the conflict in the Middle East continues to escalate, markets are concerned about the possibility of the most severe oil crisis since the 1970s. Several Asian airlines are beginning to raise ticket prices and implement emergency plans, including suspending some flights.

Hong Kong Airlines increases fuel surcharge to Japan by HKD 50 per trip

For example, Hong Kong Airlines recently announced that starting March 12, it will adjust its passenger fuel surcharges, affecting both short and long-haul routes. Popular destinations such as Japan, Korea, Thailand, and Southeast Asia will see an increase from HKD 162 to HKD 212, an additional HKD 50 per one-way trip. Long-haul routes will see a rise of HKD 150 per flight, meaning round-trip tickets will cost an extra HKD 300 just for fuel.

Additionally, sources say that India’s airlines have recently raised long-haul ticket prices by about 15% and are considering further increases. Vietnamese state media pointed out that due to heavy reliance on imported aviation fuel, local airfares could rise by as much as 70%.

Asian Airlines Are Underprepared for Oil Price Hedging

Compared to their European and American counterparts, Asian airlines are significantly less prepared for oil price hedging, making them more vulnerable. Some Southeast Asian low-cost carriers have already begun simulating various scenarios to assess whether they might need to suspend flights if fuel prices become too high or supply is interrupted.

“The entire market has hit the panic button,” said June Goh, senior oil analyst at Sparta Commodities. “For Asian airlines with insufficient hedging and previously sold tickets at low prices, the current fuel environment is extremely unfavorable.”

Industry insiders warn that if this situation persists for more than three months, some low-margin budget airlines could face bankruptcy. Deutsche Bank analyst Michael Linenberg also predicted that if the conflict continues, thousands of aircraft worldwide might be forced to suspend operations, and financially weaker airlines could temporarily cease flying.

New Zealand Airlines announced on Tuesday (10th) that it will suspend earnings forecasts due to the extreme volatility in fuel prices, which has invalidated assumptions made less than two weeks ago. The airline stated: “Due to unprecedented market fluctuations, our previous fuel price assumptions for financial forecasts are no longer valid. We expect this crisis to significantly impact profits in the second half of the year, so we are suspending our FY2026 guidance until market and operational conditions stabilize.”

These signs reflect the growing potential impact of the conflict on the global airline industry. The conflict, which has lasted over a week since the US and Israel launched attacks on Iran, shows no signs of easing. Major airports and airlines in the Middle East are nearly paralyzed, and the threat of disrupted fuel supplies continues to cast uncertainty over global aviation operations.

However, some industry insiders remain cautiously optimistic, believing the conflict may last only a few months rather than years. John Plueger, CEO of Air Lease, said: “I personally think this is a short-term phenomenon… The key point is that the world won’t stop; it might just hit the pause button temporarily.”

Airline Stocks Plunge

German Lufthansa CEO Carsten Spohr noted that the airline has a relative advantage in fuel hedging strategies. When competitors are forced to raise prices, Lufthansa could gain a competitive edge. He also mentioned that the group is increasing capacity to Asia and Africa to fill the gap left by the significant reduction in Middle Eastern airline capacity.

Nevertheless, analysts generally believe Asian airline stocks will continue to be highly volatile. As oil prices briefly surged past $100 per barrel, regional airline stocks plummeted on Monday (9th). Asiana Airlines hit a 21-year low, the Asia-Pacific airline index reached a five-year low; India’s largest airline, IndiGo’s parent company InterGlobe Aviation, saw its stock plunge over 8% in Mumbai.