Airlines Confront “Double Squeeze” Of Higher Fuel And War‑Zone Rerouting

Airlines across Asia and the Gulf are confronting a “double squeeze” in early March: surging jet‑fuel prices and the need to reroute flights around conflict zones, raising costs just as demand has largely normalised post‑pandemic.​

Recent current‑affairs coverage shows how the Hormuz blockade and missile exchanges have forced carriers to adjust flight paths between Asia, the Gulf and Europe, adding time and fuel burn. At the same time, Brent’s surge above 110 dollars per barrel and WTI’s 22% jump have sharply increased fuel bills, typically the largest cost line for airlines.​

CNBC’s tracking of Asia‑Pacific markets notes that airline and travel stocks were among the worst hit in the recent sell‑off, reflecting concerns that higher fares and potential demand weakness could erode margins. Rediff’s report on Indian markets highlighted InterGlobe Aviation—parent of IndiGo—down nearly 8% on Monday as investors priced in higher fuel and global risk aversion.

Gulf carriers such as Emirates, Etihad and Qatar Airways face particularly complex routing decisions, given their reliance on hubs near the conflict and their role as connectors between Asia, Europe and Africa. While no major Gulf airline has announced wholesale route suspensions, advisories and schedule tweaks point to increased operational complexity and crew‑scheduling challenges.

The policy context adds another twist. Gulf governments only recently rolled out wide‑ranging visa and travel‑policy reforms to boost tourism in 2026, including multi‑entry visas, regional circuits and digital border processes. South Korea’s special travel advisory for seven Middle East countries underscores the reputational hit that conflict can inflict on GCC destinations just as they seek to scale visitor numbers.​

For Southeast Asian carriers—from Singapore Airlines and Thai Airways to Garuda Indonesia—decisions hinge on route profitability and fleet deployment flexibility. Some will shift capacity toward intra‑Asia and Pacific routes less affected by Middle East risk, while maintaining a pared‑back presence on Gulf and Europe sectors until fuel and insurance dynamics stabilise.​

If the conflict eases and oil retreats later in 2026, the “double squeeze” may be seen in hindsight as a sharp but short‑lived shock. If not, airlines may need to revisit structural questions about network design, hedging, and the pace of fleet expansion in an era of more frequent geopolitical and energy disruptions.