Airlines Hit Hard as Middle East War Cuts Profits in Half

The International Air Transport Association (IATA) expects the airline sector to post a net profit of $23bn this year, down nearly half from its previous forecast of $41bn and well below the $45bn profit recorded in 2025.

IATA director general Willie Walsh cited two main factors behind the worsening outlook: soaring jet fuel prices and operational disruption caused by the conflict in the Middle East. The war between Iran and the United States and Israel has led to the restriction or closure of airspace across parts of the Gulf region, forcing airlines onto longer routes and driving up both fuel consumption and operating costs.

IATA estimates that airline fuel expenditure will rise to around $350bn this year from $252bn last year, accounting for almost a third of all operating costs. Profit per passenger is expected to fall to about $4.50, roughly half last year's level.

Despite rising costs, travel demand remains steady. Industry revenues are expected to grow 9.4% to a record $1.16tn. Walsh warned, however, that higher fuel prices could lead to the cancellation of unprofitable routes and further market consolidation. A shortage of new aircraft is adding to the pressure.

(reuters, max)