In recent years, Middle Eastern airlines have been increasing their market share in global civil aviation transportation, posing significant competition pressure on American and European airlines through advantages such as their strategic location connecting Europe, Africa, and Asia, modern hub status in Dubai and Doha, competitive pricing, and the use of the latest jet aircraft.
After the outbreak of the Iran war, the closure of Middle Eastern airspace and the suspension of flights led to a decrease in long-haul flights, causing chaos in the transportation sector. Existing patterns were disrupted overnight. Capitalizing on this situation, Western airlines quickly opened up new routes to capture passengers and regain market share.
According to Bloomberg, last month, airlines such as Lufthansa, British Airways, and Air France-KLM swiftly shifted flights to countries in Asia like India, Thailand, and Singapore. However, the growth in market share has been limited so far, as establishing sustainable growth momentum takes time.
A recent analysis by Bloomberg points out that one of the biggest challenges for European airlines to seize the opportunity is the disruption caused by the conflict in the energy market, leading to soaring fuel prices. To attract new customers, they may need to increase ticket prices or absorb the costs themselves, all while uncertain about how long the conflict will persist.
Robert Walker, an aviation analyst at consulting firm ICF, warns that Middle Eastern airlines will not abandon their ambition to be global aviation hubs, leaving the current chaotic situation as an opportunity for European carriers to capitalize on.
Flightradar24’s latest data shows a significant increase in flight capacity, primarily focused on the United States. Major airlines like United Airlines and Delta Air Lines have increased their long-haul wide-body aircraft flights by 11% and 12%, respectively. They are not only adding flights to existing European destinations but also opening up new routes to meet the demand from U.S. travelers.
With no hedging, U.S. airlines are more vulnerable to the impact of soaring aviation fuel prices. However, due to many passengers booking tickets before the fuel price hike, there has been a wave of increased demand for U.S. airlines. Walker stated that the turbulent situation in the Middle East will benefit direct flights from the U.S. to Asia and transatlantic code-sharing routes between U.S. and European airlines.
As the conflict continues, airlines with bases in the Middle East will face increasing disadvantages. Data analysis from Bloomberg shows that Turkish Airlines quickly gained some market share within a month of the outbreak of the war, while Qatar Airways suffered the largest market share loss.
Lufthansa’s short-term demand has rebounded, but they aim to adapt the newly opened routes for the long term. Lufthansa believes that shifting capacity to Asia in the long run presents a significant opportunity but comes with challenges, especially when aircraft models do not match. For instance, single-aisle jet aircraft used for Europe to the Gulf routes are not suitable for long-haul flights to Asia, and orders for new fuel-efficient wide-body aircraft often have a lead time of several years. Moreover, opening new routes requires months of preparation. Concerns over aviation fuel shortages have prompted Lufthansa management to devise crisis response plans, which may include the suspension of some flights.
Since the outbreak of the Iran war, Lufthansa’s stock price has fallen by 17%, International Airlines Group (IAG SA), the parent company of British Airways, has seen a 13% decline, and the stock price of Air France-KLM has dropped by 27%. Several European airlines have had their ratings downgraded by Morgan Stanley and UBS Group recently due to high fuel costs.
Analysts believe that once the war ends, Middle Eastern airlines will undoubtedly strive to regain market share, with price competition likely becoming a key factor in winning back customers. Richard Evans, a senior consultant at Cirium Analytics, suggests that Gulf airlines are expected to engage in price competition post-war, presenting European airlines with a limited window of high demand and high ticket prices.
The hub model in the Middle East has propelled the rapid growth of airlines like Emirates and Etihad Airways in recent decades. Emirates is estimated to have carried 55.6 million passengers in 2025, more than four times its numbers from 20 years ago, making Dubai one of the busiest international airports in the world.
Competitors have long argued that the expansion of Middle Eastern airlines has relied on unfair subsidies. Ben Smith, the CEO of Air France-KLM Group, mentioned in a recent interview last month that the competitive environment is unfair, leading to the emergence of new aircraft and opportunities.
Asian airlines have also increased their long-haul flights, with Singapore Airlines adding flights to London and Melbourne, Cathay Pacific adding flights to Paris, Zurich, and London, and Indian Airlines and Qantas focusing on expanding their European routes.
Following the 2022 Russia-Ukraine war, many Western airlines were forced to avoid Russian airspace, making flights between Asia and Europe more challenging. The closure of Iranian and Iraqi airspace after the conflict outbreak forced planes to reroute through narrow airspace over Georgia, Azerbaijan, and Central Asia, further complicating the situation.
Industry research analyst Conroy Gaynor from Bloomberg believes that European airlines face challenges in flying to Asia – airspace availability and competition with more competitive Asian airlines capable of flying over Russian airspace. The increased capacity may ultimately shift to transatlantic routes, but whether such significant growth will have enough market demand to sustain it is a concern.