Surging flight costs set to hit summer travel demand

Airfares on major long-haul routes between Asia and Europe have risen sharply, with ticket prices increasing by as much as 560% this month and expected to remain high through summer and into autumn, according to Alton Aviation Consultancy. The rise follows disruptions in the Persian Gulf, a key global aviation corridor, after conflict-related developments from late February.

For June travel, fares across key Asia-Pacific to Europe routes are about 70% higher than a year ago, based on Alton’s analysis of data from Cirium and online travel agencies. A Sydney–London ticket now averages over $1,500, nearly double last year’s price. These figures include both direct and one-stop flights, including those transiting through Gulf hubs.

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The increase is not limited to one direction. Europe-to-Asia fares have also risen, with June prices up by as much as 79% year-on-year. Some long-haul routes are now nearly three times more expensive compared to last year.

The price surge follows disruptions that began on February 28, when the US and Israel attacked Iran. Since then, about 70,000 flights have been cancelled. Airspace closures, reduced capacity at Gulf airports, and rising fuel costs have pushed fares higher and are expected to continue impacting pricing in the coming months.

Even by October, fares are likely to remain about 30% above last year’s levels.

Demand weakens amid higher fares
Higher ticket prices and uncertainty are beginning to affect travel demand. Summer bookings from Europe to the US have declined 15% compared to last year, while travel in the opposite direction has fallen 11%, according to Cirium. Bookings from Asia to Europe have also dropped by 4.4%, including routes that pass through the Middle East.

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Bryan Terry, managing director at Alton Aviation Consultancy, said the impact of rising fuel costs will continue even if the conflict ends soon. “It would take up to three months for the price reductions to work their way through the jet fuel supply chain,” he said. “What we’re seeing is not just a short-term pricing shock. Even as the immediate disruption eases, longer routings, tighter capacity and higher fuel costs will keep upward pressure on prices for an extended period.”

Key routes see steepest increases
Routes linking Asia and Europe have been the most affected, as many flights pass through Middle Eastern hubs such as Dubai, Abu Dhabi and Doha. This corridor typically handles about one-third of annual traffic between the two regions.

Ticket prices on some routes have seen steep increases. Flights from Hong Kong to London Heathrow are averaging $3,318 as of March 23, marking a 560% rise from the previous month. Bangkok to Frankfurt fares have increased 505% to $2,870, while Sydney to London fares have surged 429%.

Fuel costs add pressure
Airlines are also facing rising fuel costs, which account for about one-third of operating expenses. Constraints on shipments through the Strait of Hormuz have pushed oil prices higher, increasing concerns over supply.

Carriers including Air France-KLM, Cathay Pacific Airways Ltd. and Air New Zealand Ltd. have already raised fuel surcharges this month, passing on higher costs to passengers.

Hanming Li, an independent travel analyst, said uncertainty is influencing traveler decisions. “Things are very uncertain right now, with so much travel chaos,” he said. “If travelers see that flights are getting cancelled, delayed and disrupted, they will carefully consider whether to travel and how to travel.”

(With inputs from Bloomberg)