Analysis: Aviation has weathered storms before, but this one is different: routes are blocked, fuel is scarce and the bills are already arriving
The war between the United States, Israel and Iran is no longer just a military conflict. It is now an aviation crisis. Within weeks of the fighting escalating, airlines around the world have been hit by airspace closures, rocketing fuel prices and a sudden reminder of something many had taken for granted: just how much global air travel depends on the Middle East.
Think of it this way. The Gulf's mega airports, Dubai, Doha and Abu Dhabi, work as connecting points for flights between Europe, Africa and Asia. When those airports are disrupted, there are not many alternatives. For cargo, the picture is even more worrying. Around 30 to 32% of all freight moving between Europe and Southeast Asia passes through Middle Eastern hubs. For Europe to South Asia routes, that number rises to 55%. So, when something goes wrong in the Gulf, it does not stay there. It hits supply chains, shipping costs and delivery times across the world.
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From RTÉ Radio 1's Morning Ireland, DAA warns passengers can expect more disruption with Middle East flights
Airlines are now flying longer routes to avoid Middle Eastern airspace, which means more time in the air, more emissions, more fuel burned and higher costs all round. On top of that, there are growing safety worries. There is also a jump in satellite-navigation jamming incidents, and a rise in spoofing, where fake signals are broadcast to trick aircraft into thinking they are somewhere they are not. For pilots already flying unfamiliar, crowded detour routes, this is a serious concern.
But the biggest hit has come from fuel. The conflict has almost shut down shipping through the Strait of Hormuz, with tanker traffic dropping by 70 to 80%. That matters because 25 to 30% of Europe's jet fuel comes from the Persian Gulf.
The result has been a price explosion. In the week ending 20 February 2026, jet fuel cost about $96 a barrel. By the week of 20 March, it had shot up to $197, more than doubling in a single month. What this means is that the $17,000 it took to fill up a Boeing 737-800 on 27 February cost over $27,000 less than a week later. Even during the start of the Ukraine war in 2022, jet fuel only peaked at about $180 a barrel. We are already past that.
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From RTÉ Radio 1's Drivetime, soaring oil prices as ships attacked in the Strait of Hormuz
The finance side is brutal. The 20 biggest listed airlines have lost around $53 billion in market value since the war started. Lufthansa makes an average profit of about €10 per passenger, so there is simply no room to soak up costs like these.
United Airlines has already cut 5% of its flights, becoming the first major US carrier to scale back. Its CEO Scott Kirby is planning for oil at $175 a barrel and thinks it could stay above $100 until 2027. IATA says ticket prices could go up by as much as 9% and Deutsche Bank found that US domestic fares for late-March bookings have already jumped between 15 and 124% depending on the route.
Here is what makes it all worse. Airlines price tickets using real-time systems that constantly adjust fares based on demand, what competitors are charging, how fast bookings are coming in, and what fuel is expected to cost. These systems reprice seats thousands of times a day.
From CNN, senior business reporter David Goldman details the economic impact the Iran war is having across the travel sector
The problem is that millions of tickets were sold when fuel was $96 a barrel, but those flights will now burn fuel at $197. Airlines cannot go back and charge passengers more for a ticket they have already bought. For the next 30 to 90 days, many flights will actually lose money on every departure. New bookings can reflect the higher costs, but if airlines raise prices too fast, passengers stop buying altogether, which makes things even worse.
What separates the airlines coping from those in trouble is fuel hedging, essentially locking in fuel prices in advance. Ryanair is in the strongest position, with 84% of this quarter’s fuel locked in at $77 a barrel. IAG, which owns British Airways and Aer Lingus, is 75% covered for the first quarter but only 50% by year-end. Lufthansa is at about 82% for this quarter. Air France-KLM starts at 70% and drops to 47% by the fourth quarter. On the other hand, SAS has zero hedging at all and announced the cutting of 1,000 flights in April. Most US airlines have also stopped hedging in recent years, leaving them fully exposed.
From DW News, how airlines are paying the cost of the Iran war
Turkish Airlines is in an interesting spot. With the Gulf hubs disrupted, Istanbul is quickly becoming the go-to alternative, and Turkish is picking up a lot of new traffic. But it only hedges around 40 to 50% of its fuel, well below the 70 to 85% that top European carriers lock in so the revenue from extra passengers could end up being swallowed by higher fuel bills.
Aviation has weathered shocks before, from the oil crises of the 1970s to the post-9/11 collapse and the pandemic grounding of 2020. Each time, the industry adapted. This crisis is different in scale and complexity. The routes are blocked, the fuel is scarce and the bills are already arriving. What comes next will test whether the industry has truly learned anything from the crises that came before.
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The views expressed here are those of the author and do not represent or reflect the views of RTÉ
