What's happened
Global airlines face a sharp rise in jet-fuel costs as conflict in the Middle East pushes up oil prices. IATA now forecasts profits will fall sharply in 2026, driving airlines to raise fares and adjust routes while governments seek safety measures.
What's behind the headline?
Brief
- The conflict has tightened oil supply corridors, lifting jet fuel costs and pressuring airline profits.
- Airlines are responding with fare increases and capacity reallocation to protect margins.
- Regulators are weighing safety and airspace restrictions as disruptions persist.
What this means
- Passengers should expect higher fares this summer as operators recover costs.
- The industry faces a fragile recovery, with profits unlikely to revert to pre-crisis levels soon.
Forecast
- If fuel prices remain elevated, airline profitability will remain under pressure into the next quarter.
How we got here
The aviation sector faces sustained pressure from higher fuel costs following strikes in the Middle East and the closure of Hormuz. IATA has cut its profit forecast for 2026, while airlines are adjusting capacity and routes in response to the fuel shock.
Our analysis
- New York Post Business (Bullock discrimination case) quotes at length from Bullock and BA; - CNBC (IATA profit forecast and fuel costs); - AP News (IATA profit forecast and jet fuel costs); - Al Jazeera (IATA data; fuel price impact); - The Guardian (Abta conference and summer bookings)
Go deeper
- How will higher fuel costs affect ticket prices this summer?
- Which routes are most likely to be reduced or adjusted due to fuel concerns?
- What safety measures are regulators considering for airspace amid ongoing conflict?
More on these topics
-
American Airlines - Airline
American Airlines, Inc. is a major American airline headquartered in Fort Worth, Texas, within the Dallas–Fort Worth metroplex. It is the world's largest airline when measured by fleet size, scheduled passengers carried, and revenue passenger mile.
-
IATA - Airline
The International Air Transport Association is a trade association of the world's airlines founded in 1945. IATA has been described as a cartel since, in addition to setting technical standards for airlines, IATA also organized tariff conferences that ser
-
Bureau of Transportation Statistics - Government agency
The Bureau of Transportation Statistics, as part of the United States Department of Transportation, compiles, analyzes, and makes accessible information on the nation's transportation systems; collects information on intermodal transportation and other ar
-
Air Canada - Airline
Air Canada is the flag carrier and the largest airline of Canada by fleet size and passengers carried. Air Canada maintains its headquarters in Montreal, Quebec.
-
Strait of Hormuz - Strait
The Strait of Hormuz is a strait between the Persian Gulf and the Gulf of Oman. It provides the only sea passage from the Persian Gulf to the open ocean and is one of the world's most strategically important choke points.
-
Emirates - Airline
Emirates is the largest airline and one of two flag carriers of the United Arab Emirates. Based in Garhoud, Dubai, the airline is a subsidiary of The Emirates Group, which is owned by the government of Dubai's Investment Corporation of Dubai.
-
Middle East - Region
The Middle East is a transcontinental region that generally includes Western Asia, all of Egypt, Iran, and Turkey. Soviet Central Asia, Afghanistan, and Pakistan are generally excluded.
-
European Union
The European Union is a political and economic union of 27 member states that are located primarily in Europe. Its members have a combined area of 4,233,255.3 km² and an estimated total population of about 447 million.
-
Reuters - News organization company
Reuters is an international news organization owned by Thomson Reuters. It employs some 2,500 journalists and 600 photojournalists in about 200 locations worldwide. The agency was established in London in 1851 by the German-born Paul Reuter.
-
Cathay Pacific - Airway
Cathay Pacific Airways Ltd., more widely known as Cathay Pacific, is the flag carrier of Hong Kong, with its head office and main hub located at Hong Kong International Airport.
-
United States - Country in North America
The United States of America, commonly known as the United States or America, is a country mostly located in central North America, between Canada and Mexico.
-
Iran (Islamic Republic of Iran) - Country in the Middle East
Iran, also called Persia, and officially the Islamic Republic of Iran, is a country in Western Asia. It is bordered to the northwest by Armenia and Azerbaijan, to the north by the Caspian Sea, to the northeast by Turkmenistan, to the east by Afghanistan a