Middle East Conflict to Impact Air Travel Growth: What Investors and Businesses in Oman Need to Know
Muscat: International air travel demand increased by 5.9 percent in February 2026 compared to the same month in 2025, while capacity rose by 5.3 percent year-on-year. The load factor reached 80.5 percent, marking a 0.5 percentage point improvement from February 2025. However, this growth is expected to decelerate in April due to ongoing developments in the Middle East.
The region serves as a critical connecting hub for Africa-Asia and Asia-Europe routes. According to the International Air Transport Association (IATA), recent capacity reductions in the Middle East are likely to continue exerting downward pressure on global seat growth in the near term.
“February showed strong fundamentals for demand growth with a 6.1% increase in revenue passenger kilometres (RPK), indicating a positive outlook for the year. Nevertheless, the duration and intensity of the conflict in the Middle East remain uncertain, making it difficult to assess the full impact on airline prospects,” said Willie Walsh, IATA’s Director General. He added that fuel costs have surged sharply, pushing airfares higher amid tight capacity and thin profit margins. Airlines are also adjusting capacity deployment, particularly for routes involving the Middle East or regions affected by fuel supply challenges. For instance, capacity growth scheduled for March has been revised down to 3.3% from earlier projections exceeding 5%.
Globally, seat capacity expanded by 3.9 percent year-on-year in February but eased to 3.3 percent in March. This revision stems mainly from significant capacity cuts by Middle Eastern carriers, driven by conflict-related airspace closures in Iran that have forced flight cancellations or rerouting.
Middle Eastern airlines recorded a modest passenger traffic growth of 0.8 percent year-on-year in February 2026. The subdued performance is partly due to Ramadan beginning earlier this year (February 19) compared to February 28 in 2025, alongside geopolitical tensions and safety concerns linked to the conflict.
Prior to the outbreak of the Israel-US-Iran war, IATA’s March Long-Term Demand Projections anticipated that global air travel demand would double by 2050. Based on a comprehensive econometric model incorporating GDP per capita, population growth, and airline capacity, the forecast predicted revenue passenger kilometres would exceed 20 trillion by 2050, up from 9 trillion in 2024, reflecting a compound annual growth rate (CAGR) of 3.1 percent.
فرودگاه بینالمللی مسقط handled 2,129,229 passengers by the end of February 2026, compared to 2,098,074 passengers during the same period in 2025.
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The geopolitical tensions and resulting airspace restrictions in the Middle East are causing reduced capacity growth and rising operational costs for airlines, presenting risks to regional air travel and related businesses. For Oman, positioned as a strategic hub, this creates an opportunity to strengthen its aviation infrastructure and diversify air traffic routes to capture diverted demand. Smart investors and entrepreneurs should consider investing in resilient logistics, alternative fuel solutions, and enhanced airport services to capitalize on shifting travel patterns and mitigate rising fuel cost pressures.
