STORY: Global airlines are fighting to cope with a sudden surge in oil price.
Carriers like United Airlines and Air New Zealand have announced higher fares and lower capacity.
But the industry's ability to stay profitable may depend on whether consumers pull back on flying to save money.
The airline industry had forecast record profits of $41 billion this year.
But then came the U.S.-Israeli conflict with Iran which began last month.
Jet fuel prices have since doubled and forced carriers to rethink their strategies.
It's a blow to the industry after last year's record global passenger numbers.
They had reached about 9% above pre-pandemic levels despite supply-chain challenges.
Those factors had held back capacity growth and given airlines strong pricing power as they filled more seats on each plane.
But the scale of the rises needed to make up for the jet fuel price surge is huge.
Particularly at a time when consumers face pressure from higher gasoline prices which could hit their spending.
One analyst argued the only way to get prices up is to lower capacity.
United Airlines CEO Scott Kirby told ABC News last week fares would need to rise 20% for the airline to cover the higher fuel costs.
Hong Kong's Cathay Pacific has lifted fuel surcharges twice in the last month.
From Wednesday a return trip from Sydney to London will have an $800 fuel surcharge.
Analysts believe low-cost carriers could struggle the most.
Their passengers are more price-sensitive than the corporate and wealthy consumers who have been targeted by premium rivals like Delta and United Airlines.
The Middle East conflict is the fourth oil shock for the airline industry since the turn of the century.
Though it's the first where some carriers have spoken of concern about securing physical supplies of fuel due to the effective Strait of Hormuz closure.
One leading analyst has argued the current oil shock is expected to widen the gap between financially strong and weaker airlines.
They believe carriers with strong balance sheets, pricing power, and reliable access to capital are better positioned to deal with ongoing pressures.
And they argue airlines with low profitability and limited funding options may face more financial stress.
