A Perfect Storm for Summer Travel
Airline passengers across Asia are confronting a summer travel season defined by chaos rather than leisure, as the war in Iran sends shockwaves through global energy markets. Since hostilities erupted on February 28, the price of jet fuel has doubled, forcing carriers throughout the region to slash schedules, cancel routes, and impose hefty fuel surcharges that threaten to make international travel prohibitively expensive for millions.
The crisis centers on the Strait of Hormuz, the narrow waterway through which roughly one-fifth of global oil and liquefied natural gas shipments typically flow. With the strait effectively closed to commercial traffic, Asia’s aviation sector faces an existential challenge. The region depends more heavily on Middle Eastern energy imports than almost anywhere else in the world, leaving its airlines uniquely exposed to supply disruptions that have already triggered over 150,000 flight cancellations globally between March and June.
For travelers, the consequences extend far beyond higher ticket prices. Industry experts warn of deteriorating service reliability, reduced connectivity to secondary cities, and the potential for entire airlines to collapse under the weight of unsustainable fuel costs. As one aviation analyst observed, the current crisis represents the most severe disruption to commercial aviation since the Covid-19 pandemic, with recovery likely to stretch well into 2027.
The Mechanics of a Fuel Crisis
Jet fuel differs fundamentally from other petroleum products in ways that make this crisis particularly acute. Unlike petrol or diesel, which can be stored relatively easily by consumers and businesses, jet fuel requires specialized storage infrastructure and represents roughly 25 to 30 percent of airline operating costs under normal circumstances. Since the war began, some Asian carriers have seen fuel expenses surge to nearly 45 percent of total operating costs, a level that renders many routes economically unviable.
The vulnerability stems from Asia’s limited domestic refining capacity. While countries like Singapore, South Korea, China, and India produce jet fuel, they rely heavily on Middle Eastern crude oil as feedstock. When the Strait of Hormuz closed, refiners across the region could not maintain previous production levels. Complicating matters further, South Korea and China prioritized domestic fuel supplies after the outbreak of war, removing approximately 1.3 million tonnes of monthly jet fuel from the regional export market, or roughly 10 percent of total Asian demand.
India, which exported 8.55 million tonnes of aviation fuel in the 2025 financial year, has also turned inward. In March, New Delhi imposed export duties that rose to 42 rupees (57 Singapore cents) per liter by April, while capping domestic price increases at 25 percent monthly to protect local airlines. These protectionist measures, while understandable from a national security perspective, have left neighboring countries like Vietnam, Myanmar, and Pakistan scrambling for alternative supplies.
Airlines Scramble to Survive
The financial mathematics facing Asian carriers is brutal. At current prices, a single-aisle commercial jet burns approximately 800 gallons of fuel per hour, while widebody aircraft consume even more. With jet fuel prices doubling since February, airlines are losing money on routes that were profitable just months ago. Some smaller carriers are reportedly bleeding millions of dollars daily.
According to aviation data firm Cirium, 11 of the 20 airlines making the largest schedule cuts globally are based in Asia. Vietnamese low-cost carrier VietJet ranks third worldwide in reduction percentage, slashing its May schedule by nearly 20 percentage points, behind only Qatar Airways and Etihad of the Middle East. Other major Asian carriers including Sichuan Airlines, Garuda Indonesia, Malaysia Airlines, Xiamen Airlines, and multiple carriers under the AirAsia Group have implemented cuts ranging from 10 to 15 percentage points.
“Some Asian airlines are bleeding millions of dollars daily. As the war goes on, more flight cuts are a given.”
The AirAsia Group has already dropped entire routes, including Bangkok-Singapore and Jakarta-Kota Kinabalu, with some reductions extending through late October. Indonesian low-cost carrier TransNusa has avoided cancellations so far, but most competitors have not been so fortunate. Korean budget airline T’way Air plans to furlough cabin crew without pay during May and June, representing some of the industry’s first staffing reductions tied directly to the fuel crisis.
A Region Divided by Resilience
The impact varies dramatically across Asian markets depending on refining capacity and strategic reserves. China, Japan, South Korea, and Singapore possess the most secure positions, while nations lacking domestic refining infrastructure face existential threats to their aviation sectors.
Vietnam exemplifies the vulnerability of fuel-importing nations. The country imports more than two-thirds of its jet fuel, with 60 percent traditionally sourced from China and Thailand. With Chinese exports banned and regional supplies tightening, Hanoi has formally requested that Beijing maintain stable supplies while simultaneously seeking emergency shipments from the United States across the Pacific Ocean. The Philippines has secured fuel only through June, while Myanmar and Bangladesh face similarly precarious situations.
Reserve levels across the region paint a mixed picture. Australia maintains 30 days of reserves which remain untouched, while New Zealand had 47 days of coverage as of April 19. India claims adequate supply for 60 days, and Indonesia reported 38 days of stock in mid-March, with state energy firm Pertamina securing additional fuel to support Hajj flights through June. Malaysia’s Petronas has sufficient stockpiles until June and is actively procuring more.
However, Vietnam and the Philippines have already canceled flights early in the crisis, suggesting that official reserve figures may not reflect operational realities. Singapore, the region’s primary refining and trading hub, does not disclose exact stockpile figures, though higher inventories there provide a partial buffer for neighboring markets.
Global Ripple Effects
While Asia bears the brunt of the disruption, the crisis has spread worldwide. European airlines now face what the International Energy Agency describes as perhaps six weeks of remaining jet fuel supplies. Lufthansa has canceled 20,000 flights between May and October, removing approximately 40,000 metric tons of jet fuel from its consumption. KLM cut 160 European flights for May, while easyJet expects pretax losses exceeding 540 million pounds for the first half of fiscal 2026.
The United States, as a major oil producer with domestic refining capacity, faces price increases rather than physical shortages. American carriers including Delta, United, American Airlines, and JetBlue have responded by increasing checked baggage fees rather than base fares, though United has publicly announced fare increases and trimmed 5 percent of its schedule through the third quarter.
United CEO Scott Kirby quantified the potential damage in a memo to staff, noting that if fuel prices remain elevated, the airline could face $11 billion in additional annual costs. For perspective, he pointed out that United’s best year ever generated less than $5 billion in profit. This disparity illustrates why many analysts predict industry consolidation, with financially stronger carriers potentially acquiring distressed competitors.
Unusual Supply Routes Emerge
The crisis has triggered extraordinary measures to keep aircraft flying. In a highly unusual development, the United States is shipping military-grade jet fuel across the Pacific to Asian allies. Tenders have been issued for 235,000 barrels of JP-5 naval aviation fuel from Cherry Point, Washington, to Subic Bay in the Philippines, and 260,000 barrels to Yokose, Japan, for May and June deliveries.
These shipments represent only the fourth and fifth instances of JP-5 exports from the US since 2017, according to energy analytics firm Kpler. The military fuel, typically reserved for naval aircraft, illustrates the desperation of supply chains normally fed by Middle Eastern crude refined in Singapore and South Korea.
Commercial airlines are also adapting through operational changes. Many carriers are “tankering,” or carrying enough fuel on outbound flights to cover return journeys when destination airports face shortages. Others are consolidating multiple flights into single services to maximize load factors while minimizing fuel consumption. Cathay Pacific and HK Express have canceled certain flights from mid-May through June, while adding fuel surcharges of up to 150 pounds sterling on long-haul routes.
The Human and Economic Toll
Beyond airport terminals, the fuel crisis threatens broader economic stability across Asia. The United Nations estimates that 8.8 million people across Asia and the Pacific risk falling into poverty due to the war’s economic impacts. In Southeast Asia alone, two-thirds of crude oil imports normally transit the Strait of Hormuz, affecting everything from transportation to manufacturing and agriculture.
Rice farmers in Myanmar now pay five times pre-war prices for diesel on black markets to save their harvests, while some Cambodian farmers have abandoned replanting due to fuel and fertilizer costs. In the Philippines, northern vegetable crops rot in fields because farmers cannot afford transport to market. The garment factories of Bangladesh, which supply major Western retailers, face severe production disruptions as petrochemical-based thread prices double.
Tourism-dependent economies face particular devastation. Hotels in Sri Lanka report 80 to 90 percent drops in occupancy as airfares triple. Thailand has seen tourist arrivals fall 9 percent year-on-year in the first week of March, with major hotels reporting single-digit occupancy rates. Street vendors, artisans, and informal transport providers throughout the region face destitution as visitor numbers collapse.
What Travelers Should Expect
For consumers planning travel, the immediate outlook demands caution and flexibility. Industry experts recommend booking refundable fares with comprehensive travel insurance, budgeting for fuel surcharges of $200 to $400 on long-haul round trips, and considering advance purchases for travel in late 2026 or early 2027 when supplies may normalize.
Airlines are prioritizing high-yield routes while eliminating marginal services, meaning travelers may find fewer options to secondary cities but continued service on major trunk routes. Load factors are increasing as carriers consolidate flights, potentially reducing the availability of low-fare seats even on operating services.
Governments are beginning to coordinate responses. The European Union will present emergency measures including potential joint purchasing of kerosene and shared fuel reserves among member states. Asian aviation leaders have called for similar regional coordination, though mechanisms like the ASEAN Petroleum Security Agreement have never been activated despite existing on paper for decades.
Oil futures markets suggest prices may moderate by late 2026, but physical supply constraints could persist longer. Even if the Strait of Hormuz reopens tomorrow, refineries require weeks to resume full production, and shipping schedules need months to normalize. United Airlines anticipates oil prices remaining above $100 per barrel through the end of 2027, suggesting the era of cheap airfares has ended for the foreseeable future.
The Essentials
- Over 150,000 global flights have been canceled between March and June 2026 due to the Iran war’s impact on jet fuel supplies
- Jet fuel prices have doubled since February 28, rising from roughly $93 to over $190 per barrel at peak levels
- Asia-Pacific airlines are most vulnerable due to heavy dependence on Middle Eastern oil flowing through the now-closed Strait of Hormuz
- 11 of the 20 airlines making the largest schedule cuts worldwide are Asian carriers, including VietJet (20% reduction) and multiple AirAsia Group airlines (10-15% cuts)
- European airlines face potential fuel exhaustion within six weeks; Lufthansa has canceled 20,000 flights through October
- Fuel surcharges of $200-$400 are being added to long-haul tickets, with some carriers doubling previous surcharge levels
- Vietnam, the Philippines, Bangladesh, and Myanmar face acute shortages due to lack of domestic refining capacity
- Unusual military-grade jet fuel shipments from the US to Japan and the Philippines highlight supply chain desperation
- Industry analysts predict consolidation, with financially weaker low-cost carriers likely to merge or fail
- Supply normalization could take until late 2026 or 2027 even if the conflict ends immediately
