Airfares are soaring after jet fuel spike. What UAE residents must know before travelling

DUBAI 22°CGOLD/FOREXPRAYER TIMESNEWSLETTERSLOGIN GOLD/FOREXDUBAI 22°CPRAYER TIMES BUSINESSBUSINESSBANKING & INSURANCEAVIATIONPROPERTYTAX NEWSCORPORATE TAXANALYSISTRAVEL & TOURISMMARKETSRETAILCORPORATE NEWSTECHAUTO Business / AviationAirfares are soaring after jet fuel spike. What UAE residents must know before travelling Rising fuel costs, capacity cuts and strong demand push ticket prices higher Dubai: Airfares from the UAE are climbing sharply as airlines grapple with a surge in jet fuel prices, tighter capacity and operational disruptions linked to the ongoing geopolitical situation in the Middle East. For travellers planning summer holidays or last-minute trips, the message is becoming clear: flying is getting more expensive — and relief may not come soon. While demand for air travel remained strong in February, the ongoing conflict has introduced new challenges, particularly for airlines operating through or near the Middle East. Airspace restrictions have forced carriers to reroute flights along longer paths, increasing fuel burn and operational complexity. At the same time, fuel supply constraints are affecting how airlines deploy capacity. “Fuel costs have risen sharply. With tight capacity and thin margins, air fares are already rising,” said Willie Walsh, IATA’s Director General. He added that capacity deployment is being adjusted, especially for routes linked to the Middle East or regions facing fuel supply issues. Jet fuel, which typically accounts for 25 to 35 per cent of an airline’s operating costs, has surged significantly in recent weeks, triggering a chain reaction across the aviation sector. In the United States alone, jet fuel prices have jumped to over $4.60 per gallon, compared to around $2.50 before the conflict. Jet fuel (typically Jet A-1) is refined from crude oil, and it is a middle distillate, meaning it sits between lighter products (like petrol) and heavier ones (like diesel). Airlines globally are responding by raising fares, introducing fuel surcharges, and, in some cases, cutting capacity. Carriers such as Qantas, Scandinavian Airlines and Cathay Pacific have already announced fare increases or higher surcharges, while Air New Zealand has withdrawn its financial outlook, citing volatile fuel markets. India’s IndiGo has also hiked prices due to the ongoing crisis. The impact is not limited to pricing. Airlines are also adjusting their networks and schedules to manage rising costs. United Airlines has reduced planned flights by 5 per cent, while Scandinavian Airlines is cancelling at least 1,000 flights this month. Air New Zealand has also trimmed capacity by around 5 per cent and cancelled more than 1,100 services. These reductions are tightening the supply of available seats globally, creating a supply-demand imbalance that is pushing fares higher — including on routes to and from the UAE. To manage the cost surge, some airlines are increasingly passing on expenses to passengers. Cathay Pacific has roughly doubled fuel surcharges, while Thai Airways expects fare increases of between 10 and 15 per cent. Low-cost carriers such as AirAsia and full-service airlines like Qantas have also introduced temporary surcharges. Some airlines with fuel hedging programmes, including Lufthansa and Ryanair, have been able to cushion part of the impact by locking in earlier prices. However, for many carriers, the pace of price increases has limited their ability to absorb costs. Industry experts warn that the issue is not just the availability of crude oil, but the supply and logistics of refined jet fuel. Anita Mendiratta, aviation expert and special adviser to the UN Tourism Secretary-General, told CNBC that concerns are emerging around jet fuel deliveries, particularly in markets such as the UK. “The issue airlines are focused on is not crude oil availability but refined jet fuel and the logistics of getting that fuel to airports,” she said. Airlines have also flagged potential regional vulnerabilities, with some European markets relying heavily on fuel imports from the Gulf. While current conditions are challenging, long-term demand for air travel remains positive. IATA forecasts that global passenger demand will more than double by 2050, reaching up to 21.9 trillion revenue passenger kilometres under higher growth scenarios. “The outlook for air travel is positive. People want to travel and… demand is expected to more than double by mid-century,” Walsh said. Growth is expected to be strongest in emerging markets, particularly in Asia Pacific and Africa, while mature markets such as Europe and North America will see slower expansion. For UAE residents, the near-term outlook points to continued high fares, especially on popular routes to Europe, the US and South Asia. With fuel prices elevated, flight paths longer, and capacity constrained, airlines are unlikely to lower prices significantly in the coming months. Even if geopolitical tensions ease, industry experts say the effects on fuel markets — and airfares — could linger. Ideally, travellers should prepare for higher ticket prices, limited availability on some routes, and a need to book earlier to secure better deals, especially those planning a trip during the summer. JetBlue raises checked bag fees by as much as $9 Philippine Airlines assures sufficient jet fuel supply Philippines to cut airport fees as jet fuel prices rise AI, IX surcharge: How much will UAE-India airfare go up