SYDNEY: Global airlines have begun increasing ticket prices as jet fuel costs surge following the escalating conflict in the Middle East, with carriers warning that further fare hikes may follow if oil prices remain high.

Air New Zealand confirmed it has raised fares across its network, becoming one of the first airlines to introduce broad price increases since the war between the United States, Israel and Iran began.

Fuel Prices Driving Fare Hikes

Airlines say jet fuel prices, previously around $85–$90 per barrel, have surged to between $150 and $200 per barrel in recent days.

Due to rising costs, Air New Zealand announced the following increases:

NZ$10 increase on domestic flights

NZ$20 increase on short-haul international routes

NZ$90 increase on long-haul flights

The airline also said it has suspended its financial outlook for 2026 because of uncertainty surrounding the ongoing conflict.

Airlines Warn of Further Increases

The carrier warned that if the conflict continues and fuel prices remain elevated, additional pricing adjustments and schedule changes may become necessary.

Other airlines are also feeling the pressure. Vietnam Airlines has requested the government remove environmental taxes on jet fuel as operating costs have reportedly risen by 60% to 70%.

Airline Shares Stabilise

Airline stocks, which initially fell sharply due to the crisis, showed signs of stabilising after Donald Trump suggested the conflict could end soon.

Following the comments:

Air New Zealand shares rose 2%

Korean Air gained 8%

Qantas increased 1.5%

Cathay Pacific climbed more than 4%

Travel Industry Faces Pressure

Fuel typically represents 20% to 25% of airline operating costs, making it the second-largest expense after labour.

Higher oil prices and airspace closures in the Middle East are already forcing airlines to reroute flights, increasing travel times and ticket prices on some routes.

Tourism industries are also feeling the impact. Thailand’s tourism ministry warned that if the conflict lasts more than eight weeks, the country could lose nearly 600,000 tourists and $1.29 billion in tourism revenue.

Experts say prolonged instability in the region could significantly affect global travel demand and airline profitability.

The Nifty50 and the Sensex rebounded from a two-day slump, tracking gains in global equities as Brent crude price eased after US President Donald Trump signaled an end to war. As of 9:17 AM, the Nifty50 was trading 0.58 per cent or 143.35 points higher at 24,167.40, and the Sensex was trading 0.62 per cent or 491.68 points higher at 78,030.20.

Global Cues

South Korea’s Kospi jumped over 6 per cent to lead the recovery rally in the region, and Japan’s Nikkei 225 rose over 5 per cent.

Meanwhile, US stock futures declined after the US President Donald Trump signalled that the war with Iran may come to an end soon. He also warned that Iran would be hit 20 times harder if the country blocks oil supply from the Strait of Hormuz.

The Dow Jones Industrial Average and S&P 500 futures were trading 0.22 per cent and 0.25 per cent down, respectively.

Overnight, the Dow Jones Industrial Average and S&P 500 indices ended 0.5 per cent and 0.83 per cent higher, respectively.

Brent crude prices declined 11 per cent to $88.05 per barrel on Tuesday so far following Trump’s remarks. It was trading 10.37 per cent down at $88.70 per barrel as of 7:20 AM, according to data on Bloomberg.

Gold and silver futures rose on Tuesday as the dollar index declined on hopes for easing US-Iran tensions in the near future. Gold and Silver futures were trading 1.55 per cent and 6.06 per cent higher, respectively.

The Pakistan Stock Exchange (PSX) rebounded sharply on Tuesday, with the benchmark index jumping more than 6% after sentiment in global markets improved following US President Donald Trump’s prediction that the ongoing war in the Middle East could soon de-escalate.

During the session, the benchmark KSE-100 Index traded between a high of 157,648.77 (up 11,168.63 points, or 7.62%) and a low of 155,294.65 (up 8,814.51 points, or 6.02%) versus the previous close of 146,480.14.

During the previous session on Monday, the index shed 11,015.96 points, marking the second-largest single-day drop in the index’s history.

The index indicated at 155,783.89 (up 9,303.75 points, or 6.35%) when trading was temporarily suspended.

“Market is rebounding due to lower oil prices and improving sentiment in regional markets,” Samiullah Tariq, Head of Research at Pak-Kuwait Investment Company, told Geo.tv.

Topline CEO Mohammad Sohail told Thenews.pk that a sharp decline in global oil prices has prompted investors to aggressively buy local stocks.

Trading at the PSX was temporarily suspended after the benchmark KSE-30 Index declined by more than 5% from the previous day’s close, triggering a market-wide circuit breaker.

The exchange’s notice noted that outstanding orders were cancelled automatically and set out the re-opening schedule (Market Halt Time 09:22am; Pre-Open 10:22am; Open 10:27am).

Oil prices fell on Tuesday after hitting an over three-year high in the prior session, after Trump’s prediction eased concerns about prolonged disruptions to global oil supplies.

Brent futures LCOc1 fell $4.17, or 4.2%, to $94.79 a barrel at 0345 GMT, while US West Texas Intermediate (WTI) crude CLc1 was down $3.81, or 4%, to $90.96 a barrel. Both the contracts fell as much as 11% earlier before paring some losses.

Oil surged past $100 a barrel on Monday to hit their highest since mid-2022, as supply cuts by Saudi Arabia and other producers during the expanding US-Israeli war with Iran stoked fears of major disruptions to global supplies.

Prices later retreated after Russian President Vladimir Putin held a call with Trump and shared proposals aimed at a quick settlement to the Iran war, according to a Kremlin aide, easing concerns about a prolonged supply disruption.

Trump said on Monday in a CBS News interview that he thinks the war against Iran “is very complete” and that Washington was “very far ahead” of his initial four- to five-week estimated timeframe.

Asian stock markets also rose sharply in early trade, including in South Korea and Japan.

South Korea’s benchmark Kospi rebounded more than 5%, and the Nikkei 225 in Tokyo jumped more than 3% before falling back slightly.