Qantas Airways CEO Vanessa Hudson said the airline had "pretty good" fuel hedging in place but the spike in oil prices amid the conflict between the US, Israel and Iran was significant for the aviation industry.

"We've got pretty good hedging in place, but these are pretty significant impacts on aviation and we're just continuing to watch how it all unfolds," she said at the Australian Financial Review's business summit as the airline's shares fell for a second day, trading as much as 3.9 percent lower.

Oil prices have surged amid the widening Middle East conflict, potentially driving up the cost of jet fuel and hurting airlines' profits.

Major Gulf hubs, including the world's busiest international airport Dubai, which usually handles over 1,000 flights a day, remained closed for a fourth day due to the conflict. That has left tens of thousands of passengers stranded as aviation faced its biggest test since the COVID-19 pandemic.

Qantas said last week that it had 81 percent of its fuel hedged for the second half of its financial year ending June 30.

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Japan Airlines chief financial officer Yuji Saito said on Monday the carrier planned to adjust its fuel surcharge for international flights, but did not provide a timeframe.

In the domestic market "since there is no surcharge, we're offsetting part of the price spike through hedging," he told reporters.

Japan Airlines shares were down 3.5 percent in early trading on Tuesday. Shares of Korean Air Lines fell nearly 8 percent after resuming trade following a public holiday on Monday and shares in Hong Kong's Cathay Pacific Airways were down more than 2 percent.

Shares of major Chinese carriers Air China, China Eastern Airlines, and China Southern Airlines all dropped between 3 percent and 5 percent in both the Hong Kong and Shanghai markets.

The CEO of Australia's biggest investment bank Macquarie Group, Shemara Wikramanayake, said on Tuesday the conflict appeared likely to affect the availability of oil, as well as the cost.

"There is going to be a deliverability issue there," said Wikramanayake, whose company is one of the world's largest traders of oil and gas.

Asian airlines see surge in demand

Alternatives to Gulf airlines showed a surge in passenger bookings and ticket prices, according to Reuters' checks of the carriers' websites.

A search on Cathay Pacific's website on Tuesday showed no available economy-class seats on the Hong Kong-London route until March 11, with a one-way ticket on that day costing at least HK$21,158 (US$2,705.28), falling to a more normal HK$5,054 later in the month.

For flights from Sydney to London, Qantas is not offering any economy-class tickets on flights via its normal Perth and Singapore routings until March 17, when one is available for A$3,129 ($2,220.03) one-way. For earlier dates, it has pricey options with non-traditional stopovers such as Los Angeles and Johannesburg.

Mainland Chinese airlines' websites showed air fares on China-UK routes have also surged far above normal levels, with economy seats largely unavailable on near-term departures.

A return economy ticket typically costs under 10,000 yuan, but Air China's only option for Wednesday is business class, with a one-way direct ticket priced at 50,490 yuan ($7,338).

China Eastern is offering a Wednesday Shanghai-London ticket for 38,108 yuan, also in business class.

Economy seats reappear on Thursday, but prices remain several times higher than usual, with Shanghai-London at 25,808 yuan and Beijing-London at about 23,000 yuan.

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