The widening conflict in the Middle East has emerged as the biggest threat to the global airline industry’s profitability this year. At the meeting in Rio de Janeiro on Sunday, the International Air Transport Association (IATA) sharply downgraded its 2026 financial outlook, citing the fallout from the US and Israeli strikes on Iran. The conflict triggered widespread airspace restrictions across the region, forcing airlines to avoid key flight corridors, lengthening journey times, increasing fuel burn and reducing aircraft utilisation. The disruption has been especially severe for Gulf carriers such as Emirates, Qatar Airways and Etihad Airways, which sit at the heart of one of the world’s busiest long-haul transit networks. The near-complete shutdown of regional airspace during the initial phase of the conflict exposed the vulnerability of airlines that depend heavily on the Middle East as a global aviation crossroads.