Budget carrier AirAsia X on Monday said it was going to increase its fares as oil prices surged due to the US-Iran war in the Middle East and its consequences.
The airline further said that it will need to cut some flights in routes it can no longer cover the fuel costs.
The company has raised fuel surcharges by about 20%, while fare prices have increased between 31% and 40%, it said.
AirAsia X co-founder Tony Fernandes said in a press conference that demand for flights remained high and the airline was still committed to a planned hub in Bahrain, with its first flight scheduled for 26 June.
AirAsia X in February unveiled plans to resume flights from Kuala Lumpur to London via the Bahrain hub, its first outside Asia, with services due to begin on June 26.
However, that announcement came before the US and Israel struck Iran with missiles on 28 February, killing its Supreme Leader Ayatollah Ali Khamenei. The war further escalated when Iran retaliated, with conflicts still battering the region for over one month now.
The war has seen the closure of several airspaces. To make matters worse, Iran's blockade of the Strait of Hormuz has created a global oil and energy crisis, with jet fuel prices rising to up to $300 per barrel in some markets.
Fernandes said demand for flights remained high, however, and he was optimistic the airline would return stronger after the crisis ends.
Lufthansa warns of fuel shortage
Earlier last week, Lufthansa said it sees potential bottlenecks for jet fuel availability should the conflict in the Middle East turn into a longer war.
“Availability is already difficult at some airports in Asia,” Grazia Vittadini, who heads up Lufthansa’s technology, IT and innovation division, told German newspaper Die Welt. “The longer the Strait of Hormuz is blocked, the more critical the supply situation can become.”
What Indian airlines are doing
Indian airlines saw themselves in a limbo with key routes closed due to the US-Iran war, while OMCs hiked Aviation Turbine Fuel (ATF) prices on 1 April. However, the Centre decided to only partially hike the price by 25% for the domestic flights.
IndiGo introduced a fuel surchage from 14 March, and later increased it after the ATF price hike.
For domestic flights, the revised fuel charges will be ₹275 to ₹950, and in the case of international flights, the fuel charges will vary from ₹900 to ₹10,000. The charges, which will depend on the distance, have been made applicable from 0001 hours on 2 April .
The fuel charge will be ₹275 for domestic flights on routes that are 0-500 kms long and ₹400 for flights that fly 501-1,000 kms.
The amount will be ₹600 for 1,001-1,500 kms, ₹800 for 1,501-2,000 kms and ₹950 for distances above 2,000 kms.
Akasa Air on 14 March said it was introducing a fuel surcharge ranging between ₹199 and ₹1,300 on domestic and international flights.
Air India and Air India Express have also introduced fuel surcharges amid the Middle East conflict to offset costs.
