The Aviation Industry - Business’ Impact during War

The US-Iran war has not just a devastating impact on the daily life of Iranians, but also an impact on the lives of people all over the world. While many leading business analysts have focused on the impact it will have on economies in both the short and long term, this post uses the war to explore how the aviation industry is affected during times like these. Analysing the issues the industry faces, it will reveal how hub-based models can be significantly impacted in times like these. 

The Context

Since the start of the attacks on the 28th of February 2026, thousands of flights have been diverted and cancelled. The BBC reported that the UK Foreign and Commonwealth Office had urged against all but essential travel to the region. (Phillips and Litchfield 2026) For airlines, this requires a significant response. British Airways - the flag carrier for the United Kingdom - initially cancelled a number of flights early in March, before reducing its flight capacity in the region a few days later. (“Travel news | Information”, n.d.) With an estimated 240,000 British ‘expats’ living in Dubai alone, commercial airlines may see increased demand for easy return flights. For airlines like British Airways, capacity on reduced service would have been quickly met, prompting their customers to look at alternative ways to travel home. As such, the growing issue of the war meant that airlines faced issues from customer loyalty being challenged to declining profits. 

There are two main airlines based out of the UAE and Qatar, these are Emirates and Qatar Airways. Both operate major international ‘hubs’ in their respective countries. The region and some of its airports have been directly attacked. Clearly, there is a knock-on effect of their major hubs being put out of operation. Due to the attacks, repairs will need to be completed; however, if another attack is likely, there may be no incentive to fix issues immediately. Therefore, the airlines have to divert flights, cancel planned ones, and deal with displaced passengers. 

Let’s examine each of the following and the likely impact on the airline and the wider sector. 

1 - Diversion

Initially, any flights travelling to the region during the attacks would have been redirected. This is a safer option than continuing to fly to a region in a hostile situation; however, it would have a financial impact on the airline. Usually, airlines order ground services to fulfil their needs - this could include baggage handlers, refuelling, and staff to clean and service the aircraft and prepare it to fly again. Many airlines are fined by the airports they operate from if they exceed the length of time they have booked for their stands (the area where the aircraft park and reload). So, landing in another country, or at an airport where they do not usually fly, could incur extra charges. If this happens multiple times, as was likely happening when the attacks happened, the airline would have to hope to re-make their losses elsewhere in the future. Therefore, for the airline a diversion - although necessary - incurs a heavy financial burden. 

2 - Cancellations

The growing security threat to the region threatens the operational model of the airlines - flights have to be cancelled as they are not safe to operate at their usual capacity. Cancellations will, as such, cost the airline heavily. Passengers would be entitled to refunds and many may not wish to travel anytime soon. This means there is a reduced income for the airline, and in some cases, losses. While flights are not running, which means no fuel is ordered or used, staff still need to be paid.

Cancellations can also impact a company’s customer loyalty. Emirates and Qatar’s model is predominantly used by those transitting via Dubai and Doha to other destinations, and herein lies the issue. Many choose to travel with the two, either because it is cheaper than flying direct or because they value the service they provide. Emirates' first-class product is world-renowned for its onboard showers on the Airbus A380-800. Customers, as such, expect a standard with their service - it’s why they travel with certain companies. If they don’t get what they expect, they may take their custom elsewhere. When it comes to arriving at the destination, a slight downgrade in service may be acceptable, provided the added security of travel arrangements is in place. 

3 - Displacement 

Finally, individuals who use these carriers may not be able to travel home. 52,000 flights alone have already been cancelled. (Chokshi 2026) Thousands of passengers are likely stuck in their destinations and unable to return home with the likes of Emirates or another hub airline. This is where their competitors may see an opportunity for financial growth. For example, a British couple on holiday who flew via Dubai may not be able to return home via their original route. However, just because Emirates or Qatar cannot get them home, it doesn’t mean that a competitor like British Airways - who may also service the route - cannot step in. A direct flight, avoiding the conflict zone, may still operate - thus, other airlines step in to fulfil passenger needs. 

It isn’t just passengers; airline crew members will also be stranded. Unable to travel home via their employers, they may struggle to find accommodation. Most airlines pay for their crews' accommodation when they travel; as such, this is a further cost they incur. In the longer-term, if they cannot return home, the crew will look to their airline for support. Is it safer for them to remain away from the conflict or to travel back to their hub? 

Emirates, compared to British Airways, is owned by the Emirati Government. It is a strong international brand and has benefited from a strong period of overseas development. (Chokshi 2026) Financially, it is tied to its country - and this, given the financial situation, is fascinating… Will it survive? Will it maintain so many routes in the future? Who knows. 

Business leaders, like Phil Fersht, have commented on the knock-on impact of disruption in the Middle East. For Fersht, the closure of the Strait of Hormuz would see spikes in energy prices, inflation returning, and supply chains having to start looking at uncomfortable conversations. (Fersht 2026) How does this apply to the aviation sector? Well, for Emirates, oil will still be found within the region, so a reduced impact, but the ability to fulfil its operations is limited. The likes of its competitors, like British Airways, may see less fuel being delivered if supply is reduced, further reducing their operational capacity and the ability to repatriate individuals. Therefore, prioritisation of routes and profit has to be re-evaluated.

The Takeaway 

Conflicts like these expose the dependency of the hub-based model. Airlines both in the epicentre of the conflict and those miles away will be impacted by the conflict. Whether they have to reprioritise routes, assess operational safety, or decide to halt services indefinitely, the impact will have a knock-on effect. They must, as such, be prepared to alter their operations - sooner, rather than later, otherwise their competitors may be better placed to fulfil demand and retain customers going forward.

References

Chokshi, Niraj. 2026. “War Has Grounded High-Flying Gulf Airlines Like Emirates.” New York Times, March 15, 2026. https://www.nytimes.com/2026/03/15/business/iran-war-emirates-qatar-airways-etihad.html.

CNBC. 2026. “Iran war threatens $11.7 trillion global travel industry as passengers get caught in crossfire.” CNBC. https://www.cnbc.com/2026/03/05/iran-war-travel-flights-cruise-hotels.html.

Fersht, Phil. 2026. “What happens to the Global Economy if the Strait of Hormuz shuts down.” LinkedIn. https://www.linkedin.com/pulse/what-happens-global-economy-strait-hormuz-shuts-down-phil-fersht-v0tre/?midToken=AQHy5mZqPLCETg&midSig=0GEBbntOoALs81&trk=eml-email_series_follow_newsletter_02-newsletter_content_preview-0-read_more_banner_cta_&trkEmail=eml-e.

Phillips, Aleks, and Mary Litchfield. 2026. “Flights cancelled as new travel warnings issued after US-Israeli strikes on Iran.” BBC, February 28, 2026. https://www.bbc.co.uk/news/articles/c0rjpr575g9o.

“Travel news | Information.” n.d. British Airways. Accessed March 16, 2026. https://www.britishairways.com/content/information/travel-news.