The global airline industry is facing its most serious disruption since the COVID-19 pandemic, as the ongoing Middle East conflict hits markets, operations, and fuel supply chains. According to the Financial Times, more than $53 billion has been wiped off the value of major airlines, while rising fuel costs and airspace restrictions are forcing carriers to rethink routes.
As the war enters its fourth week, airlines are struggling to cope with a sharp surge in jet fuel prices—a cost that makes up nearly a third of airline expenses. The impact is already visible, with ticket prices expected to rise in the coming months as carriers try to protect already thin profit margins.
The Financial Toll: $53 Billion Lost
The world’s 20 largest publicly listed airlines have collectively lost around $53 billion in market value since the conflict began on February 28. Investors are increasingly betting that airline stocks could fall further if the crisis continues.
| Airline | Impact |
|---|---|
| Wizz Air | Became the most shorted stock on the FTSE 100 |
| easyJet | Facing increased investor pressure |
| Lufthansa | CEO warns higher fares are unavoidable |
Jet Fuel Prices: ‘Spiked More Than 2022’
Executives say the fuel price spike is even more severe than the shock following Russia’s invasion of Ukraine in 2022.
“Fuel spiked quite heavily after the Ukraine invasion in 2022 as well, but this has gone further north,” Kenton Jarvis, chief executive of easyJet, told the Financial Times. He described the situation as the most serious disruption since the pandemic grounded flights globally.
Even airlines that hedge fuel costs are feeling the pressure. With margins already tight—Lufthansa’s average profit is about €10 per passenger—there is little room to absorb the additional cost.
Ticket Prices to Rise
Carriers say they have no option but to increase ticket prices.
“Our average profit is about €10 per passenger, there’s no way you can absorb the additional cost,” Carsten Spohr, Lufthansa’s chief executive, warned.
The impact is already visible for passengers, with fares expected to rise further in the coming months as airlines try to protect their bottom lines.
Middle East Hubs: Epicentre of the Crisis
The impact is most visible in the Middle East itself, where major hub airlines such as Emirates, Etihad, and Qatar Airways have been forced to cut schedules due to:
- Airspace closures over conflict zones
- Falling demand for travel to the region
- Route rerouting to avoid dangerous areas
“For the guys in the Middle East, this is a big crisis,” Willie Walsh, head of airline body IATA, said. He compared the situation to the drop in demand seen after the 9/11 attacks, when transatlantic travel declined sharply.
Supply Chain and Cargo Under Strain
The disruption is not limited to passenger travel. Air cargo operations are also being affected as goods shift from sea routes to aircraft due to shipping disruptions in the Strait of Hormuz.
- Congestion at major airports
- Logistical challenges across the supply chain
- Some airports struggling to handle the surge in cargo demand
- Goods being rerouted to other locations
Airlines are also preparing for the possibility of fuel shortages, which could further disrupt global travel and trade.
What’s Next?
Despite the current crisis, some industry leaders remain cautiously optimistic. easyJet’s Jarvis said airline stocks could recover quickly if a ceasefire is announced.
However, the situation remains volatile. US President Donald Trump has issued a direct threat to strike Iran’s power plants if Tehran does not fully reopen the Strait of Hormuz within 48 hours. Iran’s Revolutionary Guards have responded that if Trump follows through, energy sites in countries hosting US bases would become “lawful” targets, and warned that the Strait of Hormuz could be completely closed.
Analysts warn that airlines without strong government backing could face serious financial trouble if the disruption continues. Some carriers are already preparing contingency plans, including reducing flights on certain international routes.
