$53 billion wiped out: Middle East war shakes global airline industry
India Today
As the war enters its fourth week, airlines are struggling to cope with a sharp rise in jet fuel prices, which have surged significantly in a short span of time. The impact is already visible for passengers, with ticket prices expected to rise in the coming months as airlines try to protect already thin profit margins.
The global airline industry is facing its most serious disruption since the Covid-19 pandemic, as the ongoing Middle East conflict is hitting markets, operations and fuel supply chains. According to the Financial Times, more than $50 billion has been wiped off the value of major airlines, while rising fuel costs and airspace restrictions are forcing carriers to rethink routes.
As the war enters its fourth week, airlines are struggling to cope with a sharp rise in jet fuel prices, which have surged significantly in a short span of time. The impact is already visible for passengers, with ticket prices expected to rise in the coming months as airlines try to protect already thin profit margins.
One of the biggest challenges facing airlines right now is the cost of fuel. Jet fuel, which makes up nearly a third of airline expenses, has surged sharply since the conflict began. Executives say the spike is even more severe than previous shocks.
"Fuel spiked quite heavily after the Ukraine invasion in 2022 as well, but this has gone further north," easyJet chief executive Kenton Jarvis told the Financial Times. He described the situation as the most serious disruption since the pandemic grounded flights globally.
Even airlines that hedge fuel costs are feeling the pressure. With margins already tight, many carriers say they have no option but to increase ticket prices. Lufthansa chief executive Carsten Spohr warned that higher fares are unavoidable, saying, "Our average profit is about €10 per passenger, there’s no way you can absorb the additional cost."
The financial hit has been severe. According to the report, the world’s 20 largest publicly listed airlines have collectively lost around $53 billion in market value since the conflict began. Investors are increasingly betting that airline stocks could fall further if the crisis continues.
With multiple energy hubs under threat, the risk to global supply chains has increased sharply. For countries like India, which depend heavily on imports, this means higher costs and tighter supply in the near term.
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