Regional airspace closures cause flight reroutes, delays, and changes to travel plans.
Dubai: Aviation across the Middle East has faced major disruption after Israel and the US launched attacks on Iran and Tehran responded with retaliatory strikes, prompting airlines to cancel flights, reroute aircraft and suspend services.
Airspace closures across Iran, Israel, Iraq, Qatar, Bahrain, Kuwait and Syria brought large parts of regional air traffic to a halt, while partial restrictions also affected flight operations in the UAE and Saudi Arabia.
According to aviation analytics firm Cirium, more than 23,000 flights have been cancelled since February 28. Of the roughly 36,000 flights scheduled to operate to or from the Middle East during that period, more than half were cancelled, removing about 4.4 million seats from the market.
Credit rating agency Fitch Ratings said the extent of the disruption will depend largely on how long the conflict continues, with potential impacts on airlines, airports and tourism. Fitch expects the conflict to last less than a month, which would limit pressure on Fitch-rated issuers. However, it warned that a prolonged conflict could put greater strain on less diversified businesses.
Major regional hub airports, including Dubai International Airport, Abu Dhabi International Airport and Hamad International Airport in Doha, have experienced schedule changes and congestion as airlines adjust routes. Fitch said more than 15,000 flights were cancelled across seven regional airports between February 28 and March 5, affecting more than 1.5 million passengers.
Airlines face losses, rising costs
Fitch Ratings said airlines lose revenue when flights cannot operate, with carriers that have hubs in affected countries facing the greatest exposure because their networks rely heavily on regional airspace. Operations over the UAE and Qatar appear particularly constrained.
Costs also rise when aircraft are forced to detour around closed airspace, extending flight times and increasing fuel burn. Fitch cited additional expenses such as technical stops, crew overtime, accommodation and airport handling. Airlines may also incur costs for meals, hotel stays, refunds or vouchers for passengers affected by disruptions. Passenger compensation, however, is expected to remain limited as the disruption stems from geopolitical conflict beyond airlines’ control.
Tighter capacity could push fares higher on affected routes, potentially offsetting some lost revenue. Oil prices are another key variable. Fitch noted that many airlines hedge their fuel exposure, typically covering about 50% to more than 80% of their needs over the next three months across Europe, the Middle East and Africa.
GCC tourism could decline
Oxford Economics estimates international arrivals to the region could fall by 11% to 27% in 2026, depending on how long the conflict continues. This would mean 23 million to 38 million fewer visitors than previously expected and a potential $34 billion to $56 billion decline in tourism spending.
Oxford Economics outlined two possible scenarios: disruptions lasting between one and three weeks, or hostilities continuing for about two months. Economies in the Gulf Cooperation Council are likely to see the largest drop in visitor numbers because they account for the biggest share of regional tourism. The United Arab Emirates and Saudi Arabia are considered particularly exposed due to their large tourism markets and reliance on aviation connectivity.
Meanwhile, Israel and Iran are expected to record the steepest percentage declines as the conflict is concentrated there. Compared with earlier forecasts, inbound arrivals to Israel could fall by 57%, while arrivals to Iran could drop by 49%.
Impact beyond airlines
Fitch Ratings said the disruption extends beyond airlines to affect airports, hotels, insurers and aircraft lessors. European airports could lose revenue and retail spending due to weaker Europe–Asia travel flows, although some may offset the decline through parking income or regulatory protections linked to traffic volatility.
Hotels with exposure to the Middle East are largely operated by global lodging groups with diversified portfolios, which Fitch said should help them absorb short-term booking disruptions. Aircraft lessors are also expected to face limited impact because their fleets are globally diversified and lease revenues are typically secured through long-term contracts.
Aviation analysts note that travel demand often rebounds once airspace restrictions are lifted, with Middle Eastern hubs remaining strategically positioned between Europe, Asia and other long-haul markets.
