Jet Fuel Surge Hits Asia's Airlines, Carriers Raise Surcharges

By Kisho Kumari Sucedaram

KUALA LUMPUR, March 10 (Bernama) -- Airlines in Asia are reviewing fares and operational plans as rising jet fuel prices linked to escalating conflict in West Asia begin to ripple across the aviation industry, with some carriers already introducing fuel surcharge adjustments.

In Malaysia, Batik Air Malaysia has confirmed to Bernama that it recently issued a notice to its travel trade partners on adjustments to fuel surcharges for both domestic and international routes, reflecting mounting cost pressures faced by airlines.

bootstrap slideshow

This confirmation follows a post circulating on the X platform by a user, Pemburu Tiket Murah, which stated that several major airlines have announced increases in fuel surcharges following the rise in global oil prices.

The posting includes Malaysia Airlines, Firefly, and Batik Air.

According to the notice dated March 9 from Batik Air, the revised fuel surcharge will take effect from March 11 for most routes, while adjustments for flights involving Hong Kong, South Korea, and Japan will begin on March 25.

bootstrap slideshow

For Firefly, a subsidiary of Malaysia Aviation Group Bhd, the adjustment will be implemented in two stages: Phase 1, effective from March 11, applicable to all points of sale (POS) except the Philippines; and Phase 2, effective from March 25, applicable to the Philippines.

Similarly, Malaysia Airlines said it will implement the adjustments in two stages.

However, Malaysia Airlines has not confirmed any adjustment when contacted by Bernama.

The adjustments come amid growing concerns across the aviation sector that disruptions to global energy flows caused by the West Asia conflict could trigger a sharp increase in jet fuel prices, forcing airlines to raise fares or review flight operations.

Jet fuel prices, previously hovering between US$85 per barrel and US$90 per barrel (US$1=RM3.94) before the conflict, have surged above US$100 per barrel in recent days.

Across the wider Asia-Pacific region, several airlines have also begun increasing fares as jet fuel costs rise.

Air New Zealand has raised prices for fares on all domestic routes, short-haul international services, and long-haul flights.

Vietnam Airlines has reportedly urged local authorities to remove the environmental tax on jet fuel, as operating costs have risen by 60 per cent to 70 per cent due to surging fuel prices.

Meanwhile, Hong Kong Airlines will also raise fuel charges from March 12 across a few routes.

A check on Singapore Airlines’ website today shows no flights between Singapore and London until March 25, while prices for available flights from March 26 onwards range from S$4,100 to S$4,300 (S$1=RM3.09).

It was reported that a one-way economy ticket from Heathrow to Singapore on March 5 was priced at S$10,916, about 900 per cent higher than fares later in the month.

Meanwhile, Cathay Pacific’s website reportedly showed no economy-class seats available on the Hong Kong-London route until March 11, when the lowest one-way fare was HK$21,158, compared with a more typical HK$5,054 later in the month (HK$1=RM0.50).

Industry experts said the aviation sector is particularly vulnerable to fuel price shocks, as jet fuel typically accounts for between 20 per cent and 30 per cent of an airline’s operating expenses.

Universiti Kuala Lumpur Malaysian Institute of Aviation Technology economist Associate Professor Mohd Harridon Mohamed Suffian, who is also an aviation industry expert, said the current situation is grave and intense in the sense that there would be tremendous economic and financial pressure on the aviation industry across numerous countries.

He noted that jet fuel constitutes a significant portion of airline operating costs, and historical data show that fluctuations in fuel prices can sharply erode profit margins.

“This was evident during the 1970s and 1990s when disruptions in jet fuel supply chains contributed to sharp increases in crude oil prices,” he told Bernama.

He added that oil prices have already exceeded US$100 per barrel and could potentially reach US$150 per barrel if disruptions at the Strait of Hormuz persist into April 2026.

According to his projection, airlines may be forced to raise ticket prices by between five per cent and 10 per cent or more if carriers fail to optimise operational costs and fuel management strategies.

He said the majority of airlines, regardless of their locations and origins, are vulnerable to the sharp increase in oil prices.

“Even though Asia is intensely affected by the constraints at the Strait of Hormuz, other regions are affected as well due to the ‘butterfly effect,’ which indicates that any chaotic economic arousal would impart financial stresses upon their counterparts,” he said.

Mohd Harridon pointed out that historical data indicate that airlines would be in a favourable financial position if operational costs were shared or transferred to passengers, but this would deter or deflate the influx of passengers, and revenues would fall sharply.

“Thus, it is imperative for airlines to calculate the financial inflection point to balance the degree of increasing flight ticket prices and the numerical loss that would be incurred if ticket prices are raised,” he said.

On March 6, the International Air Transport Association (IATA) said that the Strait of Hormuz, which normally carries around 20 per cent of the world’s oil supply, has become effectively impassable as tanker traffic collapsed by 70 per cent to 80 per cent, creating immediate implications for refined products such as jet fuel, especially for regions heavily dependent on Persian Gulf supply.

It said Europe is among the most exposed, with 25 per cent to 30 per cent of its jet fuel demand originating from the Persian Gulf.

At the same time, it added that potential alternative suppliers such as India and China face constraints of their own, as 84 per cent of crude passing through the Strait is destined for Asian markets, limiting global availability of crude oil needed for jet fuel refining.

The US-Iran conflict has significantly disrupted airport operations globally, with thousands of Middle Eastern flights being cancelled, and airspace in the region closed after the US and Israel launched strikes on Iran on Feb 28.

-- BERNAMA