* Airlines face soaring costs due to US-Israeli war

against Iran

* Delta says jet fuel adds $400 million in costs in March

alone

* Conflict disrupts global aviation, affects routes and

operations

* SAS among first airline to cut routes due to soaring

fuel costs

By Rajesh Kumar Singh, Shivansh Tiwary and Joanna Plucinska

March 17 (Reuters) - Global airlines sounded the alarm

on Tuesday over soaring jet fuel prices triggered by the

U.S.-Israeli war against Iran, warning of hundreds of millions

of extra costs, higher fares and cuts to some routes.

Delta Air Lines ( DAL ) Chief Executive Ed Bastian said the

dramatic run-up in jet fuel prices had increased the airline's

costs by as much as $400 million in March alone. The industry is

moving quickly to pass on higher expenses through fare hikes, he

told a J.P. Morgan industrials conference.

American Airlines ( AAL ) said it expects a $400 million

increase in first-quarter expenses due to fuel costs.

Among the first to act, Scandinavia's biggest airline SAS AB

said it is cutting a limited number of flights because of the

"sharp and sudden increase" in fuel prices.

"The entire European aviation system is now feeling the

pressure from a sudden fuel shock," it said in an email.

MAJOR CHALLENGE

The war, now in its third week, has thrown global aviation

into turmoil, with flights cancelled, rescheduled or rerouted as

most Middle East airspace remains closed amid fears of missile

and drone attacks.

Jet fuel prices have emerged as a major challenge, pushing

up operating costs, with European prices doubling

and Asian prices up almost 80% since the start of

U.S. and Israeli strikes on Iran in late February.

Fuel is the industry's second-largest expense after labour,

typically accounting for a fifth to a quarter of operating

costs. U.S. airlines largely stopped hedging fuel in the past

two decades, and SAS said last year it had not hedged any of its

fuel consumption for the following 12 months.

Vietnamese authorities have warned the country's aviation

industry to prepare for potential flight reductions from April

after China and Thailand halted jet fuel exports due to the war,

heightening the risk of shortages.

SHOCKWAVES THROUGH THE INDUSTRY

The United Arab Emirates briefly closed its airspace on

Tuesday in response to incoming missile and drone threats from

Iran, the second straight day of disruption after a drone caused

a fire near Dubai airport on Monday.

About 86,000 passengers travelling through Frankfurt

airport, one of Europe's largest, were affected by cancellations

in the first two weeks of the war. Only one-third of weekly

connections between the airport and the Middle East are

operating now, CEO Stefan Schulte said on Tuesday.

The mounting cost warnings show how the shockwaves from the

conflict are spreading far beyond the Middle East as airlines

navigate their biggest crisis since the COVID pandemic.

Delta's Bastian said the carrier is well positioned to

recover fuel costs and can adjust capacity if elevated prices

persist. Still, airlines will need to tread carefully with fare

hikes at a time of fragile consumer confidence.

Air France-KLM announced plans last week to

increase long-haul ticket prices to offset surging fuel costs.

Some carriers have introduced fuel surcharges, but these

risk eroding profits.

American Airlines ( AAL ) said on Tuesday its first-quarter revenue

is now expected to rise more than 10%, above its previous

forecast of 7% to 10%, as demand outperformed expectations. But

its adjusted loss per share will now be towards the lower end of

its earlier guidance range of 10 cents to 50 cents.