Australians planning a holiday are facing a brutal blow with airfares set to surge and flights slashed as jet fuel supplies tighten and China curbs exports. 

From tomorrow, a return flight from Sydney to London with Cathay Pacific will be hit by an eye-watering $800 fuel surcharge on top of the usual ticket price.

Qantas has already imposed a 5 per cent increase on international fares, while Virgin Australia has also begun raising its prices.

Jetstar is quietly cancelling one in ten of its May flights in New Zealand, and Air New Zealand has already axed around 1,100 services.

Experts warn prices are only going to get worse, with global jet fuel costs surging 11.2 per cent in a week to $175 a barrel – after jumping more than 80 per cent since late February, according to the International Air Transport Association.

‘Flights are going to be more expensive – that’s probably the base expectation for as long as this crisis lasts,’ Commonwealth Bank Head of Commodities and Sustainable Economics Vivek Dhar said.

‘While travellers will no doubt be affected, air freight, which relies on the same fuel supply, may also face higher costs and tighter capacity under these conditions.

‘If airlines can’t secure fuel for cargo operations, we could start to see disruptions and cancellations that impact the availability of certain goods,’ Dhar says.

From tomorrow, a return flight from Sydney to London with Cathay Pacific will attract an eye-watering $800 fuel surcharge – and that’s before the base fare

Jet fuel prices have doubled since February amid the ongoing war in Iran  

Commonwealth Bank Head of Commodities and Sustainable Economics Vivek Dhar said more flights could face huge price increases 

Dhar expects the disruption to last months rather than weeks, with time needed for supply chains to adjust and normalise.

‘We expect jet fuel prices to remain elevated while this disruption continues,’ he says.

Australia is particularly exposed to rising airfares due to its heavy reliance on imported aviation fuel, with China supplying about 32 per cent.

In March, Beijing ordered an immediate halt to refined fuel exports, raising fears of a global supply crunch. 

Industry sources then told Reuters on Tuesday that the ban would be extended into April, with ongoing discussions about limited volumes of oil exports to Southeast Asian countries.

Energy Minister Chris Bowen said shipments are expected to continue until late April or early May, but beyond that, the outlook is unclear.

With that deadline approaching, concerns are growing over how airlines will secure fuel in the months ahead.

At the same time, airlines in South Korea, another key supplier, have pushed their government to prioritise domestic fuel needs, adding further pressure on supply.

David Leaney, a supply chain specialist at the Australian National University, said the government has already moved to secure alternative supplies in case Chinese shipments are cut further.

Expert David Leaney (pictured) said the crisis offers an opportunity to build up resilience in Australia’s own supply chain, with less reliance on China

The Albanese government has scrambled to reach vital fuel import agreements with allies in the Asia-Pacific after China cut off exports of jet fuel

‘What’s happened is, because we normally buy so much from China, we’ve negotiated with other suppliers, and we’re buying more via Singapore,’ he said.

‘That’s mainly diesel and petrol, but it does include some aviation fuel.’

Mr Leaney said Australia’s natural gas exports was a key advantage, which could be used as leverage to secure fuel supplies.

‘We can say to some of those big players in the region – Japan, South Korea, Singapore, China – if we guarantee you supply of natural gas, you can guarantee us supply of fuel,’ he added.

He said the crisis also offers an opportunity to build up resilience in Australia’s own supply chain, with less reliance on China.

‘The more you can diversify, the more you can put in options, then the more robust and easy to recover your supply chain becomes,’ he said.

Global aviation expert Geoffrey Thomas warned the situation is being worsened by pressure within supplier countries to keep fuel at home.

‘The airlines in South Korea are lobbying their government not to export the jet fuel,’ he told the Daily Mail.

‘We supply South Korea the majority of their liquefied natural gas, and their coal, which they absolutely have to have.

‘I would imagine there will be some serious discussion about, ‘If you’re going to cut off our jet fuel supply, we might cut off your LNG.’ The same would apply to China.’

Mr Leaney said aviation fuel may face supply pressure, but the distribution network is more stable than retail fuel, with less risk of panic buying.

‘If necessary, if you’re running an international flight from Australia to Europe, you can fill up in Europe,’ he said.

Over the weekend, Prime Minister Anthony Albanese and Bowen announced they would underwrite ‘shiploads of fuel’ to secure supply in Australia.

‘The government has stepped in to help the petroleum industry purchase cargoes on the high seas,’ Mr Thomas said, adding these shipments typically include crude oil, refined petrol or aviation fuel.

‘There are tankers out there on the high seas looking for the highest bidder.

‘It’s going to be a mix of two things, government-to-government negotiations, and probably buying additional cargoes on the high seas at a more elevated price.’