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Airlines Slash Forecasts as Middle East Conflict Inflates Fuel Costs

Air New Zealand joined major global carriers in projecting significant full-year losses Wednesday as escalating tensions in the Middle East drive jet-fuel prices higher. The carrier signaled additional service reductions ahead as it grapples with mounting operating expenses. Lufthansa, Germany's largest airline, faces nearly $2 billion in extra fuel costs tied to the regional conflict. The carrier has already canceled 20,000 flights. Air Canada suspended its full-year guidance entirely, citing the volatile fuel environment. The cost pressures are forcing carriers to reevaluate capacity and route networks through 2026. While some transportation sectors report offsetting demand strength, airlines lack pricing power to pass fuel surcharges fully to passengers. This leaves margins under sustained pressure from geopolitical disruptions.