Global airline industry crashing after just one week of war on Iran
by Inside China Business [3-11-2026].
The cost of jet fuel is skyrocketing, and the prices paid to refineries to process crude into fuel is higher than the cost of oil itself.
Tens of thousands of flights across the Middle East have been canceled, and air traffic re-routed to avoid Persian Gulf airspace.
Air travel to the Middle East is highly profitable to airlines, because of the revenue mix from upper-income tourists and business travel.
Western airlines were already at a competitive disadvantage to carriers in East Asia, because of the Russia problem: Asian airlines overfly Russia, saving operations costs and time, while carriers in the US, Canada, and Europe take far longer routes around Russian airspace.
Closing scene, Jiayuguan Pass, Gansu
Resources
Airlines in Bear Market as Oil Poses 'Existential' Threat [3-6-2026]
How do you get to Bangkok now? [3-7-2026]
Jet fuel refining margins are surging to 20-year highs amid Iran war, threatening airlines [3-6-2026] Amid the war in Iran and the resultant rising oil prices, airlines are facing a jet fuel margin squeeze not seen since the aftermath of hurricanes Katrina and Rita in 2005.
Deutsche Bank Warns Energy Shock “Existential Threat” To Airlines, May Force Some To Ground Fleets [3-9-2026]
The hole in the sky: How Middle East airspace closures are reshaping global aviation [3-2-2026] Open the airplane-tracking website Flightradar24 right now and the change is unmistakable. Where one of the world’s busiest aviation crossroads should be — a dense web of aircraft linking Europe, Asia and Africa — there is instead a yawning gap. A hole in the sky.
Unfriendly skies [3-4-2022] Airlines are bracing for potentially lengthy blockages of key east-west flight corridors after the European Union and Moscow issued tit-for-tat airspace bans. The United States and Canada have also taken similar action in response to Russia's invasion of Ukraine. The unprecedented steps are aimed at pressuring Russian President Vladimir Putin to end his invasion of Ukraine, the biggest attack on a European state since World War Two. Russia has retaliated by banning airlines from dozens of countries including all 27 members of the European Union after EU ministers agreed to refuse entry to Russian airplanes including the private jets of the country's oligarchs.
Chinese airlines grab market share from US and European carriers who have to fly around Russia [8-15-2024] US and European airlines are banned from Russian airspace, and so must route around the world's largest country. This is causing much longer and costlier flights between North America and Europe, and destinations in Southeast Asia. Chinese, Korean, and Indian airlines still enjoy Russian overflight privileges, however, and can thereby offer shorter and less expensive fares. As a result, Chinese carriers are gobbling up markets and gates across international markets. Chinese airlines already operate with 30% lower costs on a passenger-mile basis compared to US- and European-flagged carriers, and their cost advantages only multiply after adjusting for the issues involving Russian airspace.
Germany to release oil reserves in global push to tackle Iran war energy price surge [3-11-2026] BERLIN, March 11 (Reuters) - Germany will release part of its oil reserves after the International Energy Agency recommended the release of 400 million barrels of oil from stockpiles, the largest such move in IEA history, Germany's Economy Minister Katherina Reiche said on Wednesday.