United Joins SAS, Lufthansa, Cathay Pacific, Spirit Airlines, Air India, and More in Struggling Against Exploding Fuel Costs and Drastic Capacity Reductions as Iran’s Strait of Hormuz Crisis Sends Shockwaves Through Global Aviation: New Report What You Need to Know

Written By: Sanjana Dubey

Sanjana Dubey

A passionate storyteller and emerging journalist, I am currently doing job while diving deep into the world of journalism. With two years of practical experience, I have cultivated a knack for transforming ideas into engaging narratives that captivate readers. My journey blends academic insight with real-world reporting, allowing me to explore culture, travel, and lifestyle through a creative and informed lens. Committed to delivering fresh, authentic, and impactful content, I strive to make every story not just read, but truly experienced.

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May 7, 2026 12:19 PM

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As the ongoing conflict in the Middle East escalates, United Airlines, SAS, Lufthansa, Cathay Pacific, Spirit Airlines, Air India, and many others are struggling with soaring fuel costs and significant disruptions in flight availability. The closure of the Strait of Hormuz, a critical chokepoint for global oil shipments, has led to skyrocketing jet fuel prices, further compounded by the geopolitical instability in the region. These rising costs and the uncertainty surrounding flight operations are reshaping the global aviation landscape, forcing airlines to adjust schedules and pricing, while leaving travelers to face the fallout of the crisis.

As global tensions escalate following the February 28th attacks on Iran by the USA and Israel, the aviation industry is grappling with significant disruptions that have far-reaching economic consequences. The closure of the Strait of Hormuz, a critical passage for oil shipments, has caused a sharp spike in fuel prices, dramatically affecting airfares and operational schedules worldwide. With the conflict’s ongoing impact on the Middle East, many airlines, including United Airlines, Lufthansa, SAS, Air India, Spirit Airlines, and Cathay Pacific, are navigating the economic fallout, managing rising operational costs, and facing shifting market dynamics.

Rising Jet Fuel Prices

The situation in the Gulf has caused jet fuel prices to double, impacting airlines across the globe. As much as 20% of the world’s oil supply is now frozen due to the blockade, pushing the price of fuel to record highs. For travel managers, the immediate concern was the safety and repatriation of travelers stranded in the region, but now, the focus has shifted to managing escalating fuel costs and adjusting airline contracts.

Since hostilities began, fuel surcharges on long-haul flights have soared, with some business class fares seeing up to $800 in surcharges alone. On top of this, base fares and ancillary charges like baggage fees have contributed to a total rise in ticket prices of up to 15%. Travel management companies (TMCs) have noted that while fuel prices have driven these increases, there are also less obvious, hidden costs, such as more frequent cancellations and re-routed flights.

Impact on Airline Schedules and Corporate Contracts

Corporate contracts are under review as airlines adjust schedules to accommodate rising fuel prices. Airlines are cutting flights to secondary and tertiary routes served by older, less fuel-efficient aircraft. This poses a significant challenge for corporate clients who depend on these routes, as fewer options are available, and in many cases, the cost of these services has increased. Travel managers are being urged to renegotiate contracts and engage in proactive discussions with suppliers to address the changes in demand and supply.

United Airlines, Lufthansa, and other carriers are already seeing adjustments to their routes and schedules as they try to adapt to these fuel shortages. Lufthansa, for example, has eliminated 20,000 summer flights, reducing capacity to save on fuel costs. With the price of jet fuel soaring to over $200 per barrel, more cuts to flight schedules could be on the horizon.

Price Increase Predictions

The sharp rise in fuel prices is expected to continue impacting airfares in the long term. Airlines, including SAS and Air India, are likely to continue increasing ticket prices as they grapple with higher operating costs. The ongoing conflict and fuel shortages suggest that these increases may persist well beyond the immediate crisis. As James Austin, director of organization development at UK-based TMC Access Bookings, notes, prices are unlikely to fall back to previous levels even once the conflict ends.

Increased flight detours due to the closure of certain airspaces have also led to longer flight times, further adding to fuel consumption. For example, some flights now experience additional detours of up to three hours, contributing to even higher fuel costs. Consequently, airlines are forced to adjust pricing and schedules to cover these costs, which could lead to fare increases of between 5% and 10% in 2026, according to industry experts.

Supply and Demand Dynamics: The Impact on Global Routes

The airline industry is already seeing shifts in both supply and demand. The suspension of flights to the Middle East has allowed airlines like Lufthansa and Air India to focus on more profitable routes, especially those linking Europe to Asia. However, the loss of routes to the Gulf has also caused some airlines to reallocate resources, leaving fewer options for travelers in the region.

As Gulf carriers like Emirates, Qatar Airways, and Etihad lose market share due to the ongoing conflict, airlines such as Lufthansa, Air India, and Turkish Airlines are picking up the slack. These carriers have seen an increase in demand as corporations look for alternatives to Gulf-based travel hubs.

Travel managers are also observing a shift in where their clients want to fly. As tensions rise, many corporations have restricted travel to or through the UAE, Qatar, and Israel. These travel bans have opened the door for other carriers, like Cathay Pacific and Singapore Airlines, to gain market share.

Managing the Crisis: What Travel Managers Should Do

For travel managers, this volatile situation calls for quick action. First, understanding the total cost of tickets, including surcharges, is crucial. As some airlines have imposed surcharges of up to 40% on tickets, managers need to account for these extra charges when negotiating corporate contracts. Travel managers should work with suppliers to renegotiate terms that reflect the increased costs, or they risk seeing significant increases in air spend.

On the operational side, travel managers are encouraged to focus on demand management to mitigate costs. While negotiating with suppliers is important, companies should also look for ways to reduce air spend by booking non-refundable tickets, flying during off-peak times, and reducing travel where possible. As airlines face increased operational costs and reduced capacity, these strategies could help companies weather the storm without overspending.

The Future Outlook: A Long-Term Crisis

Even once the conflict subsides, the effects on the airline industry are expected to linger. Airlines will need time to restore capacity, and it may take up to a year for pricing to stabilize, according to James Austin. As airlines continue to deal with the financial strain of rising fuel prices, travel managers must stay engaged with suppliers and continually assess their needs to avoid overspending.

The ongoing crisis in the Gulf highlights the vulnerability of the airline industry to geopolitical events. Airlines like United Airlines, Lufthansa, SAS, Air India, Spirit Airlines, and Cathay Pacific are all experiencing the effects of this crisis. With the fuel shortage showing no signs of resolution, the aviation industry is bracing for a long road ahead, and it will take swift action from all stakeholders to mitigate the impact on air travel and costs.

For now, companies must remain agile, adapting to rapidly changing circumstances to manage their travel spend effectively and ensure that their travelers can still fly in an increasingly complicated global environment.