Asia-Pacific Airlines Warn of Collapse Amid Fuel Price Crisis

The Association of Asia Pacific Airlines warns that carriers across the region face potential collapse due to soaring jet fuel prices linked to conflict in Iran. Wong Hong, the organization's director general, cited the May 2 shutdown of U.S.-based Spirit Airlines as a cautionary tale and urged governments to provide direct financial aid and regulatory flexibility to prevent further bankruptcies.

Response efforts vary by nation. Malaysia introduced RM5 million in ticket rebates and fee exemptions, and India reduced jet fuel import duties. However, Hong Kong and New Zealand have provided no relief. In India, major carriers including Air India, IndiGo, and SpiceJet requested that state-run oil refiners postpone planned price hikes for domestic jet fuel. The Ministry of Petroleum and Natural Gas is currently reviewing a potential 25% price increase for June, weighing the request against losses already incurred by refiners like Indian Oil Corp.

Affected carriers such as Air Asia, Air New Zealand, and Air China have implemented fuel surcharges and flight cancellations to mitigate losses. Air India has also rationalized its international network through August 2026 due to a weakening rupee and airspace restrictions. Hong cautioned that as fuel hedging expires in the second quarter of 2026, high ticket prices and inflation may further suppress travel demand following the summer peak.