The Israel-US attacks on Iran launched in March this year completely destabilised the global aviation industry, but no region was worse affected than the Middle Eastern Gulf.
Sitting directly opposite Iran, key hubs in Bahrain, Kuwait, Qatar, and the UAE were forced to suspend all traffic as drone strikes made operations unsafe. Dubai International Airport (DXB) was even directly targeted by missiles, resulting in infrastructural damage and injured personnel.
The crisis forced traffic to reroute around the region, which has become a principal stopover on Europe-Asia journeys. Major airlines, including Emirates, Etihad, Qatar Airways, and Saudia, usually operate 1,500 flights a day, spanning 389,000 seats. But demand for air travel in the Middle East plummeted by 48.1% in April 2026 compared to the same month in 2025.
Carriers in the region have become internationally renowned for their tech-forward approach and industry-leading cabin experience. However, they now face a battle to win back customers after the year’s disruption has dented the Gulf states’ reputation as reliable, secure business hubs.
Boosting reassurance to improve bookings
As peace talks between the US and Iran continue, one enticement tactic that the UAE’s leading carriers have adopted is to offer special insurance policies.
Typically, insurers do not provide cover in the event of global conflict events. But Etihad are now providing free medical insurance for all passengers, including those on stopover flights, for up to 15 days in the UAE. Emirates, meanwhile, say they will rebook customers onto another airline for free in the event of a conflict-related cancellation. Related medical expenses up to US$25,000 and a 30-day trip extension are also included should any passenger be unable to leave the country, as many were in March.
Gulf Air has implemented other tactics to grant passengers peace of mind. Loyalty benefits that might have expired earlier in the year during the worst of the conflict have been returned to members, while rebooking periods extend into 2027.
Staying competitive on price in the short-term
Many carriers worldwide have cut prices in an effort to overcome customer uncertainty around fuel price and cancellations related to the Middle Eastern conflict. But passengers will eventually have to pay for highest jet fuel costs, which could prove a boon to the recovering Gulf.
The region’s airlines have historically been able to undercut competitors by offering stopover journeys cheaper than a direct long-haul flight. The Middle Eastern conflict has only exacerbated ongoing price pressures on customer spending. Those who are planning long-haul travel might therefore be more incentivised to take a potential risk and book via the Gulf to save money.
However, in this economic environment airlines around the world will face challenges as travellers choose shorter flights and destinations closer to home. The Gulf carriers’ ability to consolidate a strong regional network will also play an important role in recovery.
Government support to restimulate tourism
While around half of passengers flying into the Gulf only transit through the airport, the region has become a tourist destination in its own right. In the UAE, direct government funding is bridging the gap between conflict and recovery. A US$400 million package was approved in May to support businesses in the hospitality sector, including suspending hotel and municipal taxes.
Due to high temperatures the summer isn’t the busiest season for tourism in the Gulf. Nevertheless, keeping leisure prices low as we head into the peak autumn/winter months should help make trips more appealing to prospective travellers and in turn boost returns for airlines.
The Gulf remains optimistic
Despite the challenges of the past three months, officials in the Gulf say they are positive that numbers will rebound. Etihad has pushed on with its expansion strategy, now running its largest-ever network across 300 daily flights, while Qatar Airways say operations are running at 85% of pre-conflict levels.
The Gulf’s airlines and governments can offer all the incentives they want in the short-term, but in an increasingly fragmented geopolitical environment it will be interesting to see whether this optimism is justified, or if customers remain cautious in the coming years.
Join us at World Aviation Festival 2026 to hear how the industry is planning for recovery post-conflict.
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