Air New Zealand cuts flights and hikes fares as fuel prices surge
Air New Zealand cuts flights and hikes fares as fuel prices surge
Air New Zealand plane
[Getty Images]

New Zealand's national airline has become the latest to cut flights and hike fares as jet fuel prices surge to record levels due to the US-Israeli war with Iran.

Air New Zealand's cancellations are expected to hit routes in and out of Auckland, Wellington and Christchurch, with flights to smaller airports unchanged.

Many airlines around the world have had to take emergency measures to counter the surge in the cost of fuel, which typically makes up 20-40% of their operating costs.

Last week, the benchmark European jet fuel price hit an all-time high of $1,838 (£1,387) per tonne, compared with $831 before the war began.

The Gulf is a major source of aviation fuel, accounting for about 50% of Europe's imports. The bulk of it comes through the Strait of Hormuz, which Iran has effectively closed in response to US and Israeli attacks.

The price surge also reflects the role Middle Eastern refineries play in jet fuel supply. The Al-Zour refinery in Kuwait alone provides roughly 10% of Europe's jet fuel imports, according to Energy Intelligence.

Air New Zealand, which had already cut some flights last month, said the "vast majority" of customers by the cancellations were being alternative offered flights on the same day.

"Like airlines globally, we're experiencing jet fuel prices that are more than double what they would usually be" a spokesperson said.

Many airlines in Asia have been cutting flights and raising fares to cope with the situation. Last week, Korean Air became the latest carrier to say it was moving into emergency management mode.

But airlines globally have been taking action. US airline UnIted Airlines and Scandinavia's SAS are among those to have cut flights and increased ticket prices.

Air France-KLM has said it plans to increase prices on long-haul flights, while Cathay Pacific is raising its fuel surcharge.

British Airways owner IAG and EasyJet have been able to hold off on either measure so far as they are buying their fuel at a price fixed before the war began.

However, Ryanair Michael O'Leary told Sky News last week that jet fuel supplies could start to be disrupted in May if the conflict continued.

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