Airlines Cancel Thousands of Flights Amid Jet Fuel Shortages, Price Surge From Iran War

Major airlines around the world have begun canceling thousands of flights and raising fares as jet fuel prices have more than doubled and physical supplies have tightened in the wake of the ongoing war in Iran and the effective closure of the Strait of Hormuz.

United Airlines became the first major U.S. carrier to announce capacity cuts, trimming about 5% of planned flights on less profitable routes. International carriers have moved more aggressively, with Scandinavian Airlines canceling around 1,000 flights in April, Air New Zealand axing 1,100 services through early May, and carriers in Vietnam and elsewhere suspending domestic routes due to fuel constraints.

The disruptions stem from the conflict that escalated in late February when U.S. and Israeli strikes targeted Iran, prompting Iranian retaliation that effectively halted most commercial shipping through the Strait of Hormuz. The narrow waterway, which normally carries about one-fifth of global seaborne oil trade, has seen traffic reduced to a trickle amid attacks on vessels, soaring insurance costs and safety fears.

Jet fuel prices, which averaged around $2.17 per gallon in the United States before the escalation, surged past $4.57 per gallon by late March, according to the Argus U.S. Jet Fuel Index. In some Asian and European markets, prices have doubled or more, reaching record levels near $200 per barrel or higher in spot trading. The crack spread — the premium for refining jet fuel from crude — has exploded, reflecting acute shortages of the refined product rather than just higher crude costs.

“Jet fuel prices have more than doubled in the last three weeks,” United CEO Scott Kirby said in a recent statement. “If prices stayed at this level, it would mean an extra $11 billion in annual expense just for jet fuel.” Kirby noted the carrier is “tactically pruning flying that’s temporarily unprofitable” while warning of broader impacts if the situation persists.

Ryanair CEO Michael O’Leary warned that if the Hormuz disruption continues into May and beyond, European airlines could face shortages of 10% to 20% of normal fuel supply by June, potentially forcing cancellation of 5% to 10% of summer flights. He said cuts would target the most constrained airports with little advance notice from suppliers.

The crisis has hit regions differently. Middle Eastern carriers such as Emirates, Qatar Airways and Etihad have canceled tens of thousands of flights due to airspace closures and safety concerns in addition to fuel issues. Asian airlines, heavily reliant on Middle Eastern crude refined in South Korea, China and elsewhere, have faced export restrictions and local shortages. Vietnam Airlines has suspended multiple domestic routes, while Korean Air has entered “emergency management mode.”

In Europe, the last major jet fuel shipments from the Middle East to the U.K. were expected to arrive this week, leaving airlines with limited reserves. Some Italian airports have already imposed refueling restrictions for certain operators. Lufthansa has prepared contingency plans that could include grounding portions of its fleet.

U.S. carriers benefit from greater domestic refining capacity and have so far relied more on fare increases and baggage fee hikes than widespread cancellations. JetBlue and others have raised checked baggage fees, while carriers across the board have introduced or increased fuel surcharges on international routes. Air France-KLM added €50 ($58) to long-haul tickets, and several Asian carriers have followed suit.

Aviation analytics firm Cirium reported that on one recent Monday, more than 7,000 flights — nearly 7% of the global schedule — were canceled, far above typical rates. North American departures saw cancellation rates spike to 14.6% on that day.

The International Air Transport Association had forecast a record $41 billion in net profits for the global airline industry in 2026 before the conflict. That outlook is now at serious risk as higher fuel costs coincide with potential weakening in travel demand from elevated gasoline prices and broader economic uncertainty.

Analysts describe the situation as a “perfect storm.” Longer reroutes to avoid Middle Eastern airspace burn extra fuel, compounding costs. Refineries in Asia have cut jet fuel production due to feedstock shortages, while strategic reserves are being drawn down in some countries.

Travelers are already feeling the pinch. Airfares on many routes have risen sharply, with some long-haul examples nearly tripling in price in extreme cases. Industry experts advise passengers to monitor bookings closely, consider flexible tickets and expect potential disruptions through the summer if the conflict drags on.

The war has also disrupted related supply chains. Cargo operators face higher costs and delays, while the broader energy shock has lifted diesel and gasoline prices, adding pressure on household budgets and potentially curbing discretionary travel.

Governments are responding variably. Some Asian nations have redirected fuel stocks domestically or sought emergency assistance. In the U.S., domestic production provides a buffer, but analysts warn that prolonged global tightness could still affect American carriers through higher prices and knock-on effects on international partners.

Billionaire aviation figures have sounded alarms. One Dubai-based jet tycoon warned that if the crisis lasts more than a month, the first airline bankruptcies could emerge as weaker carriers struggle with unsustainable costs.

The situation remains fluid. Diplomatic efforts continue, with some reports of signals from involved parties about willingness to de-escalate, but the Strait of Hormuz remains largely closed to routine tanker traffic. Any resolution could ease pressures quickly, as shipping resumes and refineries ramp up, but a prolonged standoff risks deeper economic pain.

For now, airlines are prioritizing cash preservation. Many have shifted to shorter-haul or more fuel-efficient operations where possible and are reviewing summer schedules. Low-cost carriers, with thinner margins, face particular strain despite hedging strategies that have partially mitigated the spike for some.

Passengers planning travel are urged to check airline updates frequently, as last-minute cancellations tied to fuel availability at specific airports could occur with minimal notice. Travel insurance that covers trip interruptions is recommended.

The crisis highlights the vulnerability of global aviation to energy chokepoints. Jet fuel, derived from kerosene, requires specific refining processes, and there is limited spare capacity worldwide to quickly replace lost volumes from the Gulf.

As April unfolds, more carriers are expected to announce adjustments. United’s early move may foreshadow broader U.S. capacity reductions if prices remain elevated. Delta has indicated it could trim schedules, while others watch inventory levels closely.

The human impact extends beyond higher ticket prices. Flight crews face schedule changes, airports deal with irregular operations, and tourism-dependent economies — from Europe to Southeast Asia and Australia — brace for reduced visitor numbers.

Environmental goals may also take a backseat temporarily, as airlines prioritize operational survival over sustainability initiatives that rely on costly sustainable aviation fuel.

Industry groups like IATA have called for strengthened jet fuel resilience, including dedicated reserves and diversified sourcing. The current events underscore how concentrated supply routes create systemic risks.

With no immediate end to the conflict in sight, the aviation sector faces one of its most challenging periods in years. What began as a geopolitical confrontation has rapidly translated into higher costs and fewer flights for travelers worldwide, serving as a stark reminder of interconnected global energy markets.