Airlines Are Cutting Flights and Hiking Fuel Surcharges Because the Iran War More Than Doubled the Price of Jet Fuel. Here Is Exactly What That Means for Travelers — and How Long It Will Last.

Before the US-Israeli war on Iran began on February 28, the global airline industry had projected record profits of $41 billion for 2026. Six weeks later, jet fuel prices have more than doubled, carriers are in emergency management mode, and the Philippines is considering grounding planes entirely. Here is the full picture of what the energy crisis has done to aviation — and what travelers should expect.

By NowCastDaily Economics Desk  |  April 6, 2026  |  10 min read

The Iran war's energy shock has reached one of the world's most fuel-sensitive industries with particular force. Jet fuel — aviation turbine fuel, derived from crude oil — is typically the single largest operating cost for any airline, representing 20 to 30 percent of total expenses in normal conditions. With the effective closure of the Strait of Hormuz since February 28 driving crude oil above $100 a barrel and jet fuel prices more than doubling from pre-war levels, that cost structure has been catastrophically disrupted.

CNN's Day 34 conflict coverage on April 2, 2026 reported the aviation industry's response in detail: carriers ranging from Air New Zealand to Vietnam Airlines have started cutting flights. Korean Air described itself as in "emergency management mode." The Philippines' President Ferdinand Marcos said grounding planes is a "distinct possibility." These are not small regional carriers managing thin margins — these are national flag carriers and major international airlines responding to an input cost crisis with no near-term resolution in sight.

Why Jet Fuel and Crude Oil Move Together

Jet fuel is produced by refining crude oil — specifically by processing a fraction of crude called kerosene. When crude oil prices rise, jet fuel prices follow almost immediately, because the refining process cannot substitute a cheaper input. Unlike some commodities where producers can shift to alternative sources when one input becomes expensive, jet fuel has no viable substitute at scale. There is no battery-powered long-haul aircraft in commercial service. Hydrogen aviation is a decade away at minimum. Airlines must buy fuel at whatever price the market sets.

Before the war began on February 28, Brent crude was trading at approximately $66 a barrel. By late March, it had risen above $113 — a 71 percent increase. Jet fuel prices, which typically trade at a premium above crude, rose proportionally. Airlines that had hedged their fuel exposure — locking in prices through derivatives contracts ahead of the disruption — were partially insulated. Those that had not were absorbing the full increase in real-time operating costs.

Chinese carrier Colorful Guizhou Airlines disclosed on April 5, 2026, per CNN's conflict coverage, a plan to raise fuel surcharges by five times for domestic routes starting that day. Five times. That is not a routine adjustment — it is an emergency pricing measure that signals the airline's underlying costs have moved far beyond what can be absorbed without passing the full increase to passengers.

China's Unusual Position: Both Insulated and Exposed

China's position in the aviation disruption is nuanced in a way that other affected countries' is not. Chinese carriers are benefiting from one specific structural advantage: China maintains access to Russian airspace, which allows its airlines to fly Europe routes over Russia rather than taking longer paths around the Middle East or through Siberia. As other carriers have been forced to reroute away from the disrupted Gulf region, Chinese airlines have added thousands of flights to Europe — a competitive gain that has increased their market share on some of the world's busiest long-haul routes.

At the same time, China imports approximately 75 percent of its oil through the Persian Gulf corridor, per ongoing NowCastDaily coverage. Chinese carriers, despite their routing advantage, are still exposed to global jet fuel prices — which are set by the same crude oil benchmarks affected by the Hormuz closure. China's solution to the gas supply shortfall has been to expand coal production for power generation, per NPR reporting on March 24, 2026 — but there is no coal substitute for jet fuel in aircraft engines. China's airlines are exposed regardless of their geopolitical positioning.

The government's response has been to ban jet fuel exports — prioritizing domestic aviation supply over export revenue. That ban, reported in CNN's April 2 coverage, ensures Chinese carriers have access to supply. But it also withdraws Chinese jet fuel from the global market, tightening international supply further and contributing to higher prices for carriers in other countries.

What Travelers Are Paying — and Will Pay

Fuel surcharges are the mechanism by which airlines pass energy cost increases to passengers. Unlike base fares — which are set competitively and adjusted slowly — fuel surcharges can be added or increased rapidly as input costs change. Most airline booking systems display surcharges separately from base fares, but they are included in the total ticket price. When a carrier announces a fuel surcharge increase, it is effectively repricing every ticket in its inventory.

The US Postal Service's announcement of an 8 percent fuel surcharge on packages beginning April 26, 2026 — the first time USPS has ever imposed such a charge — provides a useful benchmark for how broadly energy cost increases are flowing through logistics and transport systems. If the postal service, which historically absorbs fuel costs in its flat-rate pricing, is now adding surcharges, airlines — which have always charged surcharges and can increase them quickly — are facing pressures at least as severe.

For travelers with upcoming bookings, the practical implications depend heavily on whether they purchased refundable or flexible tickets. Fixed-price tickets purchased before the war may not be subject to post-purchase surcharge additions under most carriers' terms and conditions — but checking individual airline policies is essential, as rules vary significantly by carrier and route.

The $41 Billion Profit Forecast That No Longer Exists

The International Air Transport Association had forecast record airline industry profits of $41 billion for 2026, published before the February 28 war start, per CNN's Day 34 reporting. That forecast assumed oil prices in the $65 to $75 range and normal Strait of Hormuz transit conditions. With oil above $100 and jet fuel more than doubled, those profit forecasts are effectively obsolete. The industry is now doing the opposite arithmetic: calculating how large its losses will be, how quickly it can cut capacity to match reduced demand, and how long fuel hedges can provide partial insulation before they expire and full market prices take hold.

Airlines with significant Middle East exposure — particularly Gulf carriers including Emirates, Etihad, and Qatar Airways — face the additional challenge of operating in the region directly affected by the conflict. Flight numbers for those carriers remain well below pre-war levels. Qatar Airways, which had been the world's most awarded airline by multiple industry rankings, is operating at approximately 20 percent of normal capacity as of late March 2026, per Flightradar24 data cited in NowCastDaily's March 26 coverage. Emirates is back to roughly three-quarters of pre-war capacity. These are extraordinary reductions for carriers whose business models depend on high utilization rates.

📊 NowCastDaily Analysis

📌 Key Facts

• $41 billion — Airline industry profit forecast for 2026 before the war; now effectively void
• More than doubled — Jet fuel price increase since February 28, per CNN April 2 reporting
• 5x surcharge hike — Colorful Guizhou Airlines (China) domestic fuel surcharge increase from April 5
• 20% — Qatar Airways current capacity vs. pre-war levels (Flightradar24 data)
• ~75% — Emirates current capacity; recovering but well below normal
• China jet fuel export ban — Government measure to protect domestic supply, tightening global availability
• 8% — USPS fuel surcharge on packages from April 26; first in USPS history

Sources: CNN — Day 34 Iran War: Airlines Under Pressure, April 2, 2026  ·  NPR — Iran War Economic Impact, April 2026