Asian Airlines Add Fuel Surcharges as Middle East Crisis Forces Flight Cuts

(SOUTH KOREA) — Asian airlines are trimming flights, imposing fuel surcharges, raising fares and carrying extra fuel after a Middle East war that began February 28, 2026, with a U.S. airstrike on Iran sent jet fuel prices from $85–90 per barrel to $195 by mid-March.

The Middle East crisis has also closed airspace across the region, forcing more than 40,000 flight cancellations to and from the region since February 28. Carriers now face the added burden of loading extra fuel or planning additional refueling stops to avoid sudden diversions.

Across Asia, the response has spread quickly from boardrooms to booking systems. Airlines have cut routes, reviewed spending, and passed part of the cost to travelers through higher fares and fuel surcharges.

South Korean carriers have moved early. Asiana Airlines entered emergency management on March 25, 2026, reviewing costs and sharpening its focus on profitability, while T’way Air declared emergency measures on March 16.

Other South Korean airlines have already reduced schedules. Eastar Jet suspended Incheon–Phu Quoc flights from May 5 to May 31, and Air Premia canceled 26 Incheon–Los Angeles flights, 6 Incheon–Honolulu, 8 Incheon–San Francisco, and 2 New York flights between April and May.

Those cuts reflect a broader problem for Asian airlines as fuel costs climb far above pre-war levels. Jet fuel now exceeds double pre-war levels and accounts for 20–25% of operating costs, second only to labor.

The strain is acute in Asia because many carriers and economies depend heavily on fuel flowing from the Middle East. China, India, Japan and South Korea take 75% of regional crude, leaving the region exposed when oil supply routes come under pressure.

One chokepoint stands out. Disruptions around the Strait of Hormuz threaten a route that carries about 20% of global oil flow.

That exposure has become visible in markets as well as flight schedules. Asiana Airlines fell to a 21-year low, while the BI Asia Pacific Airlines index dropped to a 5-year low as oil topped $100/barrel.

In India, airlines raised long-haul fares by 15%, with further increases planned. Carriers also imposed fuel surcharges of up to 12% on international flights.

Vietnam has warned of even steeper increases. State media said airfares could rise by up to 70% because of import reliance, while airlines there are consolidating flights.

Japanese airlines are also cutting back. Carriers are slashing international route capacity as the cost of operating long-haul services rises.

Elsewhere in Southeast Asia, low-cost airlines are weighing more severe action. Some are preparing to ground planes if fuel becomes too expensive, while low-cost routes are seeing price increases of 15–20%.

That pressure reaches beyond headline fares. Airlines that must carry extra fuel burn more weight over long distances, and carriers forced to avoid parts of the Middle East face longer routings and more complex operations.

For Asian airlines, the problem is not only price but also supply risk. Europe has ample fuel, but Asia’s dependence on imported supplies has raised concerns over fuel availability for return flights from the region.

Those worries have sharpened as the conflict drags on. The International Energy Agency chief called the crisis the greatest energy security challenge, and the risk of sustained disruption has raised the prospect that high prices could last for months.

If that happens, Asian route networks may not return quickly to their earlier shape. Airlines are already adjusting schedules, pruning weaker routes and preserving cash where they can.

The burden falls unevenly across the industry. Full-service carriers have more room to shift fleets and fares, but budget airlines that depend on thin margins and heavy aircraft use face tighter choices.

That is why analysts are warning of a deeper shakeout. Deutsche Bank analysts said thousands of aircraft could be grounded and the weakest carriers could halt operations without relief.

The effect may spread from airline balance sheets to passenger demand. Analyst Tan said demand may drop as leisure travel costs rise.

That demand risk matters because airlines had counted on travelers to fill cabins through the spring and summer period. Instead, higher fuel bills are colliding with fare increases that may deter holidaymakers first.

Business travel may prove more resilient, but long-haul leisure routes are already under pressure. The cancellations by Air Premia on services to Los Angeles, Honolulu, San Francisco and New York show how quickly long-distance flying can become harder to sustain when fuel spikes.

South Korea offers a concentrated example of the wider pattern across the region. Airlines there are responding with emergency programs, route suspensions and schedule reductions rather than waiting for fuel markets to settle.

Asiana’s move into emergency management on March 25 came after the crisis had already forced airlines across the region to rethink operations. T’way Air’s emergency declaration on March 16 showed how quickly the cost shock reached airlines that operate on tighter margins.

Eastar Jet’s suspension of Incheon–Phu Quoc service from May 5 to May 31 also points to how carriers are protecting routes where yields may no longer cover fuel costs. Shorter suspensions can conserve cash while airlines watch whether oil prices retreat.

In India, the 15% rise in long-haul fares and fuel surcharges of up to 12% on international flights suggest airlines are trying to transfer part of the shock directly to passengers. That may protect revenue per seat, but it also raises the risk that travelers delay or cancel trips.

Vietnamese carriers face a similar bind with fewer buffers. State media’s warning that fares could rise by up to 70% reflects the country’s dependence on imported fuel and the difficulty airlines face when every increase feeds directly into ticket prices.

Japanese airlines are responding with capacity cuts rather than waiting for losses to build. Slashing international route capacity can reduce immediate exposure, though it also cedes market share and disrupts travel plans.

Low-cost airlines in Southeast Asia face some of the harshest choices because their model depends on cheap fares, quick turnarounds and high aircraft use. A fuel shock of this scale can erode that model fast, especially when fare increases of 15–20% risk pushing price-sensitive travelers away.

Asia’s exposure also differs from that of airlines in Europe and the United States because hedging is weaker. That leaves more carriers directly exposed when crude and jet fuel surge.

Once jet fuel moved from $85–90 per barrel to $195 by mid-March, the effect on operating economics became immediate. Airlines that could not absorb the increase had little choice but to raise prices, cut flying or both.

The closure of Middle East airspace has made those choices harder. More than 40,000 flight cancellations to and from the region since February 28 have already disrupted networks, and airlines still flying near the area must plan around sudden changes in access.

That operational uncertainty adds another layer of cost. Carriers must either take on extra fuel as insurance or schedule extra stops, both of which reduce efficiency and complicate aircraft rotations.

For long-haul airlines, especially those linking Asia to Europe or North America, those decisions can determine whether a route remains viable in the short term. Every added stop, added ton of fuel or canceled flight weakens returns.

Investors have already marked down the sector. Asiana’s drop to a 21-year low and the BI Asia Pacific Airlines index falling to a 5-year low show how markets are pricing in the prospect of weaker earnings and further cuts.

Oil above $100/barrel has amplified that pressure. Even before the latest shock, fuel was one of the largest costs facing carriers.

Now it is moving deeper into strategic decisions. Airlines are not only trimming around the edges but reviewing fleets, schedules and route structures in case the Middle East crisis lasts longer than initially expected.

The broad danger for the region is that a temporary fuel shock becomes a structural change in air travel. If prices stay elevated for months, carriers may pull back from marginal long-haul routes and concentrate on services with stronger yields or shorter stage lengths.

That could leave passengers paying more for fewer choices. Leisure travelers may feel the first effect, but route reductions can also reshape business travel and tourism flows across Asia.

For now, airlines are responding with the tools they control most directly: fewer flights, higher fares, fuel surcharges and more conservative operations. Behind each move is the same calculation, as Asian airlines try to keep flying through a Middle East crisis that has turned fuel from a volatile cost into the industry’s central test.