In an interview published Tuesday with Manager Magazin, Lufthansa CEO Carsten Spohr described how escalating geopolitical risks in the Middle East are threatening the strategic advantage held by flagship carriers such as Emirates and Qatar Airways whose hubs in Dubai and Doha have traditionally acted as global connectors.

Geopolitical Headwinds for Key Hubs

“The major hubs of the Gulf carriers are located in a region that is now clearly exposed to new risks,” Spohr said, pointing to how the conflict around Iran has disrupted airspace and heightened security concerns for airlines operating through the Gulf.

Those risks come as the war has forced reroutes, temporary suspensions and broader operational uncertainty across the region. Industry analysts say that closures of airspace over parts of the Middle East have already forced many airlines to bypass previously essential Gulf hubs, diverting traffic along longer but potentially safer paths.

For decades, Gulf carriers have leveraged their strategic location between Europe, Asia and Africa to build vast networks with competitive transit times and pricing. But with the current conflict stirring instability and airlines reducing operations at key Middle East airports, that model is now under strain.

European Aviation Sovereignty in Focus

Spohr also used the interview to critique Europe’s growing reliance on non‑European hubs for connecting traffic to Asia. “It weakens European sovereignty if we are increasingly less able to connect to the growing markets of Asia via our own routes,” he told the magazine.

Lufthansa has already responded to the disruption by expanding its direct long‑haul services. Over recent days, the group has announced extra flights to Asia and Africa to meet passenger demand that has shifted amid Middle Eastern route closures, including additional services from Munich to Singapore and Frankfurt to Cape Town.

Industry observers note that this disruption offers a rare opening for carriers capable of flying direct between Europe and Asian markets, bypassing the Gulf entirely a strategy that Lufthansa appears keen to exploit in the near term.

Middle East Conflict Reshapes Aviation

The broader backdrop to these developments is the ongoing Iran conflict, which has caused wide‑ranging disruptions across regional airspace and global travel patterns.

With Gulf airspace closures and heightened war risks, airlines from Europe and beyond have been forced to reroute flights around the Middle East, sometimes dramatically lengthening journeys and increasing fuel costs. Some carriers have even suspended certain Middle Eastern routes altogether.

The shifts have not only affected passenger travel but cargo logistics too, with aviation and logistics groups warning of medium‑term effects on traffic flows and supply chains.

Looking Ahead: Competition and Connectivity

While Spohr stopped short of predicting a complete collapse of Gulf carriers’ market share, his comments mark a notable challenge to their long‑standing status in international aviation.

The crisis has underscored how geopolitics can upend established travel networks and force carriers to rethink strategic priorities. For players like Lufthansa, this could mean prioritizing expanded direct services and investing more heavily in European hub connectivity to maintain competitiveness.

Industry watchers will now be watching closely to see whether the current shifts evolve into a longer‑term realignment of global airline traffic flows.

________________________________________________________________________________________________________________

Industry executives say the spike in fuel prices triggered largely by escalating geopolitical tensions in the Middle East has significantly increased operating expenses, forcing carriers to consider fare hikes and additional surcharges to offset the rising costs.

Jet fuel prices surge amid geopolitical tensions

Jet fuel prices have risen dramatically in recent weeks following the escalation of conflict involving Iran, which has disrupted global oil markets and created fears of supply shortages. Prices that previously hovered around $85–$90 per barrel have surged to roughly $150–$200, according to airline industry data.

Fuel is typically the second-largest expense for airlines after labour, accounting for roughly 20–25% of operating costs, meaning sudden increases can quickly erode profitability.

Executives warn that airlines cannot absorb such increases indefinitely and will ultimately have to pass some of the costs on to consumers through higher fares or fuel surcharges.

Airlines begin raising fares

Several carriers have already taken steps to increase ticket prices.

Air New Zealand said it had implemented “initial fare adjustments,” raising one-way economy tickets by around NZ$10 on domestic routes, NZ$20 on short-haul flights and up to NZ$90 on long-haul routes, while suspending its financial outlook for 2026 due to the uncertainty surrounding fuel markets.

Meanwhile, Qantas Airways confirmed it would raise prices on several international routes, citing rising fuel expenses linked to the Middle East conflict.

Other airlines across Asia and Europe are also reviewing pricing strategies and operational schedules as fuel costs continue climbing.

Route disruptions and longer flights

Beyond higher fuel costs, airlines are also grappling with airspace closures and rerouted flights, particularly across parts of the Middle East.

To avoid potential conflict zones, airlines have been forced to divert flights along longer routes between Asia, Europe and Oceania increasing fuel consumption and operational complexity.

These detours are tightening capacity on key routes and pushing airfare prices higher, especially on long-haul international travel.

Airline profits and stock prices under pressure

The spike in oil prices has also rattled financial markets, with airline stocks falling sharply amid concerns that rising fuel costs could reduce profitability and dampen travel demand.

Shares of several major U.S. carriers including American Airlines, United Airlines, Delta Air Lines and Southwest Airlines have declined as investors assess the potential impact of higher operating expenses on the industry.

Analysts estimate that the largest U.S. airlines could face billions of dollars in additional annual fuel costs if prices remain elevated throughout the year.

Balancing fares and passenger demand

Airlines now face a delicate balancing act: raising ticket prices enough to offset higher costs without discouraging travelers.

Industry analysts say carriers will likely introduce gradual fare increases or fuel surcharges, rather than immediate large price hikes, to avoid weakening demand.

“Airlines will try to recover the extra costs carefully,” said one aviation analyst, noting that even small increases per ticket can help offset large increases in fuel expenses across thousands of daily flights.

Travel outlook remains uncertain

Despite the rising costs, global travel demand has remained relatively strong so far, with some international routes still reporting high occupancy levels.

However, aviation experts warn that if fuel prices continue climbing or geopolitical tensions worsen, the airline industry could face reduced passenger demand, more cancellations and slower growth in global tourism.

For now, travelers planning flights later this year may want to book early, as airlines continue to adjust fares in response to one of the most volatile fuel markets the industry has seen in years.

________________________________________________________________________________________________________________