Stock Markets March 23, 2026

Gulf carriers reel as Iran conflict curtails flights and trims capacity

Drone and missile strikes disrupt major hubs, pushing airlines to slash routes and contend with rising costs

By Nina Shah
Gulf carriers reel as Iran conflict curtails flights and trims capacity

Major Middle Eastern airlines have seen operations severely curtailed after the Iran conflict produced drone and missile activity across the Gulf. State-backed carriers grounded flights following initial strikes on Iran on February 28 and have only partially restored capacity since, while the disruption has pushed up costs, reduced passenger demand and forced extensive rerouting.

Key Points

  • Attack drones and missile strikes across the Gulf disrupted flights and forced route changes, impacting major airport hubs.
  • After strikes on February 28, flight counts for Emirates, Etihad, flydubai, Qatar Airways and Air Arabia dropped to near zero and have only partially resumed.
  • Recovery levels differ by carrier - Emirates at about 75% of pre-conflict capacity, Air Arabia and Etihad around 50%, flydubai near 33%, and Qatar Airways about 20% - affecting carriers, travel demand and related markets.

Commercial aviation across the Gulf has been severely disrupted by recent hostilities involving Iran that have introduced attack drones and missile strikes into the region, interfering with operations at primary airport hubs and prompting widespread changes to flight routing.

Following the initial strikes on Iran by U.S. and Israeli forces on February 28, several state-backed carriers registered precipitous declines in scheduled flights, with counts falling to almost zero in the immediate aftermath. The group of carriers most affected includes Emirates, Etihad Airways, flydubai, Qatar Airways and Air Arabia.

Operations out of the United Arab Emirates - which cover the Dubai and Abu Dhabi hubs - have not remained suspended but have only gradually come back online. Data from Flightradar24.com indicate traffic has resumed in a limited form, yet activity remains substantially below the pre-conflict baselines.

The degree of restoration has not been uniform across carriers. Dubai-based Emirates has managed to recover roughly three-quarters of its capacity that existed before the strikes. By contrast, Air Arabia and Etihad have each returned to about half of their typical operating levels. Flydubai is functioning at about one-third of its pre-conflict capacity, while Qatar Airways is operating at roughly 20% of the levels seen before the attacks, according to Flightradar24.com.

The upheaval has had several commercial and operational consequences. Passenger demand and fares have been affected, producing revenue pressure on carriers. In addition, the conflict has fed upward pressure on jet fuel costs; airlines that lack hedges against oil prices face particular exposure to those increases. The disruptions have not been confined to the immediate region - schedules across Europe and Asia have been altered, some airlines have grounded aircraft temporarily, and flights have been extended in duration when aircraft must detour around conflict zones.

These developments reflect a combination of security-driven airspace constraints and the economic effects that follow when major hubs reduce operations. While some carriers have cautiously restored services, data show substantial variance in recovery pace and remaining operational risk for carriers and markets tied to Gulf aviation corridors.


Source of operational data: Flightradar24.com.

Risks

  • Prolonged operational disruptions could further depress passenger demand and fares, negatively affecting airline revenues and the broader travel sector.
  • Rising jet fuel costs present financial pressure for carriers without fuel hedges, increasing operating expenses for the aviation sector.
  • Ongoing airspace constraints and route diversions may cause extended flight times, grounded aircraft and persistent schedule volatility that could ripple into Europe and Asia.

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