The global aviation industry has completed its post-pandemic recovery, but for Middle East carriers the picture is more complicated. Geopolitical conflict, airspace restrictions, and supply chain bottlenecks are reshaping routes, freight volumes, and profitability — even as the underlying demand for air travel remains strong.
Recovery Is Complete Globally, But the Middle East Lags
Traffic volumes surpassed pre-Covid levels as early as 2024, and most global markets are now growing at more than 6% year on year. The Middle East, however, is on track to expand more slowly than previously projected due to the latest regional escalation. Once tensions ease, carriers such as Emirates, Qatar Airways, and Etihad are well-positioned to rebound quickly, given their hub-and-transfer model — but their dependence on connecting flows means airspace disruptions hit them harder than most.
Cargo Revenues Under Pressure Despite Rising Freight Rates
The conflict’s impact on cargo has been significant. Chargeable weight from the Middle East and Africa dropped more than 20% year on year since tensions intensified, falling nearly 30% by late March before stabilising in mid-April. Freight rates, meanwhile, have surged more than 50% year on year amid constrained capacity and higher fuel surcharges.
For Gulf carriers, belly cargo is not a side business — Qatar Airways generates around 20% of its revenue from these operations, Etihad approximately 15%, and Emirates roughly 10–15%. By contrast, major US carriers typically derive no more than 5% from belly cargo, making Middle Eastern airlines disproportionately exposed to freight market volatility.
UAE’s Strategic Role in Regional Supply Chains
The UAE’s position as a net exporter of pharmaceuticals and fresh produce to Middle Eastern markets adds another layer of risk. With a regional pharmaceutical trade balance of approximately $1.2 billion in 2024, prolonged airspace restrictions could create shortages across the region as the UAE redirects supply to meet domestic demand during periods of heightened disruption.
What Needs to Happen for Profitability to Improve
Looking ahead twelve months, profitability could improve — but only if regional tensions de-escalate and the Strait of Hormuz remains stable, keeping oil prices in check. Some carriers, such as Delta Air Lines, have already absorbed higher fuel costs through fare increases and a stronger focus on premium cabins. Premium bookings continue to outperform economy across most major carriers, while low-cost operators face a tougher environment as their customer base is more sensitive to price increases.
Structurally Stronger, Situationally Constrained
The aviation sector in 2026 is navigating a dual reality: structurally stronger than before the pandemic, yet held back by geopolitical uncertainty, elevated fuel costs, and persistent supply chain delays in aircraft and engine deliveries. The capacity to expand is there. The speed of that expansion will depend almost entirely on how quickly the region stabilises.
Analysis by Sergey Glinyanov, Senior Analyst, Freedom Broker.
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