Iran war pushes Middle Eastern airlines towards $4.3bn loss in 2026

The escalation of conflict in Iran has dealt a significant financial blow to airlines operating in the Middle East, with losses projected to reach $4.3 billion in 2026, according to the International Air Transport Association's (IATA) June outlook. Following the US and Israel's air strikes on Iran on February 28, 2026, retaliatory attacks were launched on several Middle Eastern military installations, including in Qatar, the UAE, Kuwait, and Bahrain.

In response to these attacks, several international airports, such as Dubai, the world's busiest for international passengers, Abu Dhabi, Kuwait, and Bahrain, saw their airspace closed due to safety concerns. The airports gradually reopened a week later as hostilities subsided.

The war has had far-reaching consequences for regional aviation, leading to a decline in passenger and cargo demand, a reduction in private jet flights, and global repercussions stemming from high jet fuel prices. Consequently, airlines operating from the Middle East have experienced a shift in their financial outlook, with the IATA predicting a $7.2 billion net profit in 2025 to transform into a $4.3 billion net loss in 2026.