Middle East Air Travel Collapses
The Iran conflict has shut down much of Middle East air traffic, stranding hundreds of thousands of travelers as major airports close and airlines suspend flights. Etihad suspended flights until March 3 with some evacuations rumored, while expats are fleeing Dubai with 'half booking out' to Oman and Saudi via drives. The US State Department issued a worldwide caution for Americans abroad.
The current disruption to Middle East air travel is the most significant since the COVID-19 pandemic, with analysts noting the unprecedented simultaneous shutdown of all three major Gulf transit hubs. The conflict, reportedly named Operation Epic Fury, escalated following US-Israeli strikes on Iran and the subsequent death of Iran's Supreme Leader, Ayatollah Ali Khamenei. In retaliation, Iran launched strikes on various regional targets, including touristic and major travel hubs like Dubai, Abu Dhabi, and Doha. The scale of the flight cancellations is staggering, with over 2,800 flights canceled on Saturday and 3,156 on Sunday, according to the tracking platform FlightAware. By Monday, another 1,239 flights had been preemptively canceled. The airspace over Iran, Iraq, Kuwait, Israel, Bahrain, the UAE, and Qatar was nearly empty as of Monday. This has left hundreds of thousands of passengers stranded globally, from Bali to Frankfurt. Major international hubs, including Dubai International Airport (the world's busiest for international travel), Abu Dhabi's Zayed International Airport, and Doha's Hamad International Airport, have been directly impacted. Reports indicated that Dubai International and Zayed International suffered damage from Iranian strikes, with one death and multiple injuries reported in Abu Dhabi. The prolonged closure has scattered flight crews and pilots worldwide, complicating the resumption of services. The economic fallout is spreading beyond the immediate region. Airline stocks have tumbled, with British Airways-owner IAG dropping 9%, and Lufthansa and Air France-KLM both falling 7%. Asian carriers like Japan Airlines and Singapore Airlines also saw significant drops. The conflict is also expected to drive up oil prices, with analysts predicting they could climb as high as $100 per barrel, further pressuring airline operating costs. In response to the escalating conflict, the U.S. State Department has issued Level 4: "Do Not Travel" advisories for Iran and Iraq. This is the highest warning level and advises Americans not to travel to these countries for any reason due to risks of terrorism, unrest, and arbitrary detention. For Americans already in Iran, where there is no U.S. Embassy, the guidance is to shelter in place. The disruption has forced airlines to find new, longer routes. Iranian and Iraqi airspace had become more critical for East-West travel following the rerouting of flights away from Russia and Ukraine. Now, carriers are being squeezed into even narrower corridors, with some alternative routings adding up to three hours to journey times. For those stranded, options are limited and costly. Some of the wealthy have reportedly chartered private jets out of Saudi Arabia to Europe at costs of up to $350,000. Meanwhile, various governments are discussing repatriation flights for their citizens. In the UAE, the Department of Culture and Tourism has requested that hotels extend the stays of travelers who are unable to leave. The impact extends to air cargo, placing further strain on global trade lanes already affected by disruptions at sea. The closure of the Strait of Hormuz to shipping by Iran is expected to significantly impact India's oil and gas imports, with around 50% of its crude imports normally passing through the strait. This could lead to a 15% to 20% increase in freight rates and war-risk insurance premiums.
