- IATA reported a 1.7pc year-on-year global passenger traffic decline in June 2026
- Middle Eastern airlines experienced a 13.9pc drop in passenger demand
- Kuwait saw a 27.3pc reduction in seat capacity with intermittent airport closures
- Dubai seat capacity remained 17.4pc lower than the previous year
- Middle Eastern airlines are projected to move from $7.2 billion profit to $4.3 billion loss
Middle Eastern airlines have experienced a 13.9pc drop in passenger demand as the Iran conflict continues to disrupt regional aviation
The International Air Transport Association has reported a third consecutive month of global passenger traffic decline, with June 2026 figures showing a 1.7pc year-on-year reduction. Regional capacity for Middle Eastern carriers has decreased by 11.3pc, with airspace restrictions and a surge in jet fuel costs cited as the primary factors. Kuwait has been the hardest-hit country, with a 27.3pc drop in seat capacity and intermittent closures at Kuwait International Airport due to regular target strikes.
Dubai has reclaimed its position as the world’s busiest international airport, though seat capacity remains 17.4pc lower than the previous year. Qatar and Bahrain have faced severe disruptions, with capacity down roughly 8.5pc at Hamad International Airport and Bahrain. The European Union Aviation Safety Agency has formally advised all civilian operators to avoid the airspace of Iran, Iraq, Lebanon, Bahrain, Kuwait, Qatar, the UAE and the western Gulf of Oman at all flight levels. Airlines have been operating under temporary tactical routes with heavy flow management.
The conflict has caused severe economic damage to the aviation market, with Middle Eastern airlines projected to move from a $7.2 billion net profit to a $4.3 billion net loss. Jet fuel prices have doubled due to Iran effectively blocking the Strait of Hormuz, forcing global carriers to reroute around Egypt and the Caucasus. Emirates has been operating at about three-quarters of usual capacity, while Air France plans to restart select regional routes in late August. British Airways, Cathay Pacific and Singapore Airlines have targeted a late October resumption, with Air Canada pushing returns back until January 2027.
