Middle East aviation: A war-torn sky costing billions

Closed airspace, rerouted flights, surging fuel prices and rising insurance costs are placing unprecedented strain on the global airline industry.

In the Middle East, war is no longer confined to the ground. It has spread to the skies, where airlines are confronting a volatile mix of disrupted routes, sharply rising costs and persistent uncertainty. The result is mounting pressure on a strategic sector, with losses running into the billions of dollars. Since, the escalation of hostilities involving Iran on one side and Israel and the United States on the other, global air transport has entered an unprecedented period of turbulence. Airspace closures forced detours and surging operating costs are reshaping the economic balance of airlines already weakened by an unstable international environment.

Closed airspace: An immediate shock

The impact has been swift and visible. In Beirut, the conflict has led to near-paralysis of air traffic, with the country’s airspace at times almost empty. Across the region, during the most critical phases, more than 3,000 flights were cancelled daily. Even major international carriers suspended routes, underscoring how security risk has become a central factor in route planning.

Longer routes, shrinking margins

Where flights continue, they are forced to bypass entire regions (including Iran, Iraq and Syria) adding 30 minutes to more than two hours to journey times on key routes.

These detours carry a significant cost: higher fuel consumption, disrupted crew rotations and cascading delays. An additional hour of flight time can cost up to $10,000, translating into tens of millions of dollars per month for large airlines.

In economic terms, routes that were once profitable are increasingly becoming marginal or even loss-making.

Jet fuel: The real systemic shock

The most destabilizing factor, however, is fuel. In April 2026, jet fuel prices reached around $1,900 per ton, up from $750 before the conflict. While crude oil prices rose by roughly 50 per cent, jet fuel prices at times surged by 200 to 250 per cent, reflecting acute tensions specific to aviation fuel markets.

Aircraft consume on average five tons of fuel per hour, pushing hourly fuel costs from around $3,500 to nearly $9,500 an increase of roughly 60 per cent per flight.

For some airlines, the impact is severe. United Airlines has warned that sustained price levels could add up to $1bn in annual costs.

Insurance: Risk becomes structural cost

Fuel is not the only burden. Insurance costs have also surged. In conflict zones, so-called “war risk” premiums have risen by three to five times within weeks. Airlines are now paying millions of dollars more per aircraft annually, while in some cases insurers have withdrawn coverage altogether, turning theoretical risk into immediate operational constraints.

A sector scaling back

Faced with this accumulation of pressures, airlines have little choice but to cut capacity. In Lebanon, traffic fell by 150,000 passengers in just 12 days, while fuel consumption dropped by 70 per cent, reflecting a sharp contraction in activity.

Globally, the trend is widespread: 19 of the world’s 20 largest airlines have reduced capacity, global capacity has been cut by around 3 per cent

Outlooks are deteriorating quickly, with expected growth of 4 to 6 per cent potentially turning into a contraction of up to -3 per cent.

Ticket prices under pressure and a fragile balance

In this environment, higher fares are becoming unavoidable. Fuel accounts for roughly 35 to 40 per cent of ticket prices, but airlines must also absorb rising costs related to crew, maintenance, insurance and airport charges.

The result is a gradual increase in fares, often through fuel surcharges, alongside route reductions. Yet airlines face a delicate balance: raise prices too much, and demand may weaken further compounding losses.

The aviation sector has historically proven resilient, weathering crises including the Covid-19 pandemic.

But the current situation is distinct in its convergence of energy shock, geopolitical risk and global network disruption.

Today, airlines are flying longer routes for lower returns. Between rerouted flights, soaring fuel costs and rising insurance premiums, global aviation is entering a new phase one defined by higher costs, greater uncertainty and increased fragility.

And as is often the case in this industry, one conclusion remains unavoidable: the final bill will ultimately be paid by passengers.