• Fuel price surge and conflict are hitting airlines and Middle East tourism, with arrivals forecast to fall by up to 27 per cent
• Passenger confidence in Gulf carriers remains strong, with most willing to return within three to six months after the conflict
• Higher airfares are shifting behaviour, with leisure travellers adjusting plans while business travel holds steady

The Middle East aviation outlook following the war on Iran may be “messed up, but there is hope”, according to US-based Atmosphere Research Group, which conducted a survey across five key markets – Australia, Hong Kong, India, the UK and the US – shortly before last week’s Aviation Festival Asia in Singapore.

President and airline industry analyst Henry H Harteveldt, in his keynote address on March 25, described the 77.7 per cent jump in the US Spot Jet Fuel Index – from US$2.42 per gallon on February 27 before the war to US$4.30 per gallon on March 24 – as “unbelievable, unsustainable, unaffordable”.

Harteveldt highlighted Saudi Arabia’s warning that oil prices could exceed US$180 a barrel if the conflict continues, adding that attacks on energy infrastructure could cause long-term damage and that future price levels remain uncertain.

“Oil and jet fuel disruptions are impacting countries across the Indo-Pacific region,” he commented.

With Gulf tourism severely impacted and the WTTC estimating losses of US$600 million a day in visitor spending, arrivals in the Middle East could fall by 11 to 27 per cent compared to December 2025, translating to losses of US$348 million to US$568 million.

Emirates, Etihad Airways and Qatar Airways carry a significant share of Asia-Pacific traffic, particularly on Europe-Asia and Europe-Australasia routes.

Non-Gulf carrier capacity to the Middle East is mixed, with SAS, Air New Zealand, Cebu Pacific, United Airlines and China Southern cutting flights, while Norwegian, Air France-KLM, Lufthansa and Frontier Airlines have added capacity.

Atmosphere’s online consumer survey – with 1,000 respondents in Australia, 500 in Hong Kong, 1,500 in India, 1,250 in the UK and 1,500 in the US – shows Gulf carriers have maintained passenger confidence.

He said: “Despite the attack on Gulf airports, nearly nine in 10 passengers view Gulf region airlines as safe.

“Once fighting has stopped and the region is believed to be stable, five per cent of passengers would fly a Gulf carrier ‘immediately’, 51 per cent would consider flying a Gulf carrier within three months after the war ends, and 29 per cent would fly within three to six months after fighting ends.”

As for the ability to fund future travel, the survey shows that “passengers were struggling to save enough to travel even before the war on Iran began”.

In Australia, 33 per cent said it was more difficult, compared to 22 per cent who said it was easier; 27 per cent versus 25 per cent in Hong Kong, 42 per cent versus 29 per cent in India, 35 per cent versus 26 per cent in the UK, and 39 per cent versus 41 per cent in the US, bucking the trend marginally.

However, Harteveldt offered some optimism. “Of the few passengers with March/April travel plans affected by the war, most plan to travel.”

The survey showed four per cent of leisure passengers and seven per cent of business travellers had March/April trips affected by the war. Business travellers “show enormous conviction”, being 3.6 times more likely to change airlines than cancel, with 69 per cent proceeding as planned and 15 per cent cancelling.

Rising airfares are also influencing leisure travel decisions as passengers look to save money.

Harteveldt said 25 to 34 per cent will change travel dates, 19 to 28 per cent will cancel, 21 to 26 per cent will switch airlines, and 11 to 16 per cent will change destinations but keep their preferred airline.

“The risk of higher fares has prompted some leisure passengers to book flights earlier,” he added, as “passengers fear if inflation accelerates, they may not be able to take a summer holiday or vacation trips”.

Speaking at a panel discussion following the keynote, Richard Nuttall, president of Philippine Airlines (PAL), sees a window of opportunity, though it may narrow once Gulf carriers “gradually work their way back, buy back market share”, and return to normal within 12 months.

“The reality is we don’t know (when the region and airlines will rebound), but we need to take advantage when we can,” he commented.

Azim Barodawala, CEO of Volantia, a re-commerce platform that helps airlines drive new, measurable revenue on peak flights, called for “passenger flexibility”.

He noted that PAL and Saudia Airlines are still able to move passengers and are not overbooked.