Gulf aviation’s resilience set for another test as war, fuel shock reshape outlook

The Middle East aviation sector is navigating its most challenging environment in decades, with the International Air Transport Association (Iata) projecting global airline net profits will halve to $23 billion in 2026, down from $45 billion in 2025. The Middle East region is expected to be the only one slipping into collective losses due to conflict-related disruptions involving Iran, Israel, and the United States, which have forced costly operational adjustments, including near-complete airspace shutdowns at conflict onset. Iata warns fuel costs will surge nearly 40% this year to $350 billion, with Brent crude averaging $95 per barrel—up from $69 in 2025. Willie Walsh, Iata’s director general, noted Gulf carriers like Emirates, Etihad Airways, Qatar Airways, and Saudia are maintaining connectivity despite financial strain, but profitability will remain under pressure. Analysts argue Gulf carriers hold structural advantages, including younger fleets, strong balance sheets, and government-backed strategies. Manoj John, CEO of AeroConnections UAE, described the current crisis as a stress test for a system built to adapt to decades of geopolitical and economic disruptions. The region’s hubs in Dubai, Doha, Riyadh, and Abu Dhabi remain critical crossroads for global air travel, connecting Asia, Europe, Africa, and the Americas. While the conflict and fuel inflation pose immediate challenges, the Gulf’s aviation model is underpinned by high passenger demand and an unmatched geographic position. Experts suggest the sector’s resilience will reinforce its strategic importance, even as short-term profitability declines. The Middle East’s carriers continue to outperform competitors by leveraging digital capabilities and government support amid turbulence.