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Air New Zealand cuts flights due to fuel price hike.

Air New Zealand announced on Thursday that it would cut 5% of its flights or approximately 1,100 services, until early May, as the Iran War?drives up jet?fuel costs and disrupts travel, even in rural areas located thousands of miles away from the conflict zone.

New Zealand Airlines led the way in this week's announcement of airfare increases, along with Qantas Airways from Australia, Scandinavian SAS, and Thai Airways. The sudden spike in fuel prices that has shaken the aviation industry around the world is blamed.

Due to the drone and missile attacks that have severely restricted airspace, many airlines have been forced to cancel flights into and out of the Middle East conflict. This has caused the largest aviation crisis since the pandemic.

Prices of oil?rose on Thursday, after Iraqi officials reported that Iranian explosive-laden ships had struck two fuel oil tanks amid global supply disruptions. Iran also said the world must be prepared for oil priced at $200 per barrel.

Nikhil Ravishankar, CEO of Air New Zealand, told Radio New Zealand (owned by the state) that due to domestic and foreign flight cuts about 44,000 passengers out of 1.9 million who flew through early May will have to be accommodated.

In the next few weeks, airports serving areas like?the popular New Zealand winemaking area Marlborough? and?westcoast city New Plymouth? will experience a reduction of services.

Ravishankar stated that fewer long-haul routes would be cut as the U.S. routes are now more popular on their way to Europe after Middle Eastern airspace has been closed.

He said, "People still want to go to Europe. We can bring them there via the U.S. Airspace, which is what we are focused on."

Air New Zealand shares fell 1% on Thursday, following the same trend as Cathay Pacific in Hong Kong, Qantas Airways in Australia and Japan Airlines.

Two drones were shot down near Dubai's airport, the busiest in the world. Bahrain evacuated a few planes as the attacks on infrastructure continue to disrupt air traffic across the Gulf.

The war also has 'disrupted' shipping along the world's most important oil export route. Oil prices have soared and global travel has been disrupted. Airline tickets for some routes are sky-high and there are fears of a travel slump.

Thai Airways, which has already taken on more passengers from and to Europe, said that travellers are also scrambling to find carriers that do not fly over the Middle East.

Cathay Pacific is cancelling its flights to Dubai, Riyadh and other Middle Eastern cities until the end of the month. Instead they are adding more flights to London and Zurich to take advantage of the surge in demand for Asia to Europe flights that avoid the Middle East.

The government of Vietnam warned that fuel shortages could affect domestic airlines as early as next month, highlighting the impact of the conflict outside the Middle East.

(source: Reuters)