Escalating Conflict Disrupts Air Travel and Tourism
The ongoing conflict between the United States and Israel against Iran has created widespread chaos in the airline and tourism industries. Airlines and governments are working urgently to manage the consequences, including the cancellation of over 20,000 flights in recent days, which has left thousands of travelers stranded across the Middle East.
Major Gulf hubs, such as Dubai, the world’s busiest international airport, have remained closed or severely restricted for a fourth consecutive day. This has resulted in tens of thousands of passengers being unable to travel. According to Flightradar24, approximately 21,300 flights have been canceled at seven major airports, including Dubai, Doha, and Abu Dhabi, since the attacks began.
This situation has significantly disrupted travel across a region that includes several thriving business hubs. These areas are striving to move away from oil-dependent economies. The conflict has also reduced the already limited flight corridor for long-haul flights between Europe and Asia, making operations more challenging for global air carriers.
Stranded Travelers Seek Repatriation
Travelers across the Gulf are rushing to secure seats on a limited number of repatriation flights as governments work to bring passengers home. Despite the ongoing explosions in Tehran and Beirut, airlines like Emirates, flydubai, and Etihad have been operating a limited number of flights since Monday, primarily to repatriate stranded passengers.
Paul Charles, CEO of luxury travel consultancy PC Agency, described the current situation as “the biggest shutdown we’ve seen certainly since the COVID pandemic.” He added that the impact on cargo would be in the “billions of dollars.”
Many passenger airlines also transport cargo in their aircraft bellies, leading to disruptions in air freight. Cargo specialist FedEx stated it is using “contingency measures” in the Middle East but did not specify what these measures are. Earlier, the company had mentioned resuming pickup and delivery services in the region where possible.
Emergency Evacuations and Government Actions
The United Arab Emirates government reported that 60 flights had taken off, operating through dedicated emergency air corridors. The next phase will involve more than 80 flights.
The United States is securing military and charter flights to evacuate Americans from the Middle East. A US State Department official confirmed this on X, stating they were in contact with nearly 3,000 US citizens. However, the department faced criticism from lawmakers who argued that the Trump administration should have advised people to leave before the attacks started.
Delta Air Lines paused its New York-Tel Aviv flights through March 22 due to the conflict. The airline is offering rebooking options and a travel waiver for affected customers through March 31.
Surge in Alternative Routes and Economic Impact
Demand for alternatives to Gulf airlines has increased, with bookings and ticket prices rising on routes such as Hong Kong-London. Analysts estimate that if the conflict continues, the Middle East could lose billions in tourism revenue.
Tatiana Leclerc, a French tourist stuck in Thailand, expressed her frustration: “We can’t get home, we can’t go back to work, we can’t get the kids back to school.” Her original flight was scheduled to go via the Middle East hubs, which serve as a key link between Asia and Europe.
An early sign of relief came when Virgin Atlantic announced it would resume services as scheduled between London’s Heathrow Airport and Dubai or Riyadh.
Airline Stocks Decline
Shares of air carriers worldwide fell on Tuesday. Karen Li, J.P. Morgan’s head of Asia infrastructure, industrials and transport research, noted that the operational and financial effects vary significantly among airlines.
“There are important differences across carriers in terms of hedging strategy, air cargo exposure, and network rerouting capabilities that will shape the actual impact from the Middle East situation,” Li said.
Oil prices have surged amid the widening conflict. Benchmark crude is up roughly 30% so far this year, threatening to increase jet fuel costs and squeeze airline profits. Most US airlines no longer hedge fuel purchases, their second-largest operating cost after labor.
In its latest annual filing, Delta revealed that every one-cent increase in the price of jet fuel per gallon adds about US$40 million to its yearly fuel bill. A 10% increase would add US$1 billion to Delta’s 2026 fuel bill, according to Third Bridge analyst Peter McNally.
Market Performance and Fuel Hedging
Shares of most US carriers ended lower, with Southwest down about 1% and Alaska Air off roughly 2%. In Europe, shares of Wizz Air, British Airways owner IAG, Lufthansa, and Air France KLM fell by 5% to 8%.
Ryanair CEO Michael O’Leary told Reuters that the airline is hedged for the next 12 months at about US$67 a barrel and that the recent fluctuations would not impact the business. Its stock fell 2.2% on Tuesday.
Qantas Airways CEO Vanessa Hudson stated the airline has “pretty good” fuel hedging, but the spike in oil prices is significant for the industry. The Australian airline’s shares fell 1.8%.
Shares of Japan Airlines closed down 6.4%, while Korean Air Lines dropped 10.3%, its biggest fall since March 2020, as it resumed trading after a public holiday on Monday.
Shares of major Chinese carriers, including Air China and China Southern Airlines, lost between 2% and 4% in Hong Kong and Shanghai.
