Airlines operating in the Middle East are projected to move into collective losses in 2026 as escalating regional tensions, restricted airspace access and sharply higher fuel costs place significant strain on the sector, according to the latest outlook from the International Air Transport Association (IATA).

The industry body said that while carriers in other regions are also expected to see weaker profitability, the Middle East is likely to be the only region to post an overall net loss.

Across the global aviation industry, profits are expected to fall substantially. IATA forecasts net earnings declining from $45 billion in 2025 to $23 billion in 2026, with profit margins narrowing from 4.2 per cent to 2.0 per cent.

Willie Walsh, Director General of IATA, said the outlook has deteriorated due to conflict-related disruption in the Middle East and a significant rise in fuel costs. He noted that jet fuel prices have increased by nearly 70 per cent globally, forcing airlines to absorb higher operating expenses despite ongoing efficiency improvements and fare adjustments.

Walsh added that while all regions remain profitable, performance has weakened sharply across the board, except for the Middle East. He said Gulf carriers are operating under considerable uncertainty following major airspace disruptions linked to the onset of conflict, though they continue to maintain global connectivity despite financial pressure.

IATA estimates that global fuel expenditure will rise from $252 billion in 2025 to $350 billion in 2026, accounting for more than 31 per cent of total airline operating costs, compared with 25.4 per cent the previous year.

The projection is based on an average Brent crude price of $95 per barrel in 2026, up from $69 in 2025. Jet fuel is expected to average $152 per barrel, significantly higher than the previous year, while the spread between crude and jet fuel prices is expected to remain elevated.

Although airlines are hedging roughly one-third of their fuel needs, IATA warned that carriers remain exposed to sustained price increases and high refining margins.

Overall fuel consumption is forecast to remain steady at about 104 billion gallons in 2026, meaning that higher fuel prices are the primary driver of rising industry costs.

Walsh also highlighted that the sector’s financial resilience is under pressure, with average net profit per passenger expected to fall to $4.50, nearly half of the level recorded in 2025.

The Middle East is expected to be the most affected region, as geopolitical instability leads to capacity reductions, flight disruptions, and higher operating costs. Reduced transit traffic is also weighing on load factors, further increasing unit costs for airlines.

Despite these challenges, IATA said Gulf carriers continue to work to sustain global connectivity, even as financial headwinds intensify across the region.

Source: ZAWYA

Turkish Airlines has signed a strategic agreement with CFM International to strengthen engine maintenance capabilities and support the expansion of its Boeing 737 MAX fleet.

The long-term services agreement will cover the airline group's entire LEAP-1B engine fleet, including engines already ordered and delivered, spare engines, units installed on leased aircraft and potential future options. The combined total exceeds 600 engines operated by Turkish Airlines and its subsidiary, AJet.

The memorandum of understanding (MoU) was signed during a ceremony in Istanbul by Turkish Airlines Chairman of the Board and the Executive Committee, Prof. Murat Şeker; Turkish Technic CEO and Board Member, Mikail Akbulut; and Safran CEO Olivier Andriès. Safran is one of the two parent companies of CFM International.

The agreement also includes a material services arrangement to support the development of an engine maintenance, repair and overhaul (MRO) facility in Türkiye.

Şeker said the partnership would help Turkish Airlines accommodate fleet and network growth while improving operational efficiency. He added that the expanded services agreement would provide the technical expertise and long-term support required to develop LEAP engine maintenance capabilities.

Akbulut said the agreement would enable Turkish Technic to undertake comprehensive LEAP engine maintenance. He also reaffirmed the company's commitment to investing in engine services alongside its existing aircraft and component maintenance operations.

Andriès described the MoU as another milestone in a relationship with Turkish Airlines that has lasted nearly four decades. He said the agreement reflected both companies' ambitions to support the airline's growth and fleet expansion, while promoting an open MRO ecosystem offering flexible, competitive services to improve operational performance and control costs.

GE Aerospace Chairman and CEO H. Lawrence Culp Jr. also welcomed the agreement, highlighting Turkish Airlines' extensive international network and its confidence in CFM engines. He said the partnership would build on the companies' established relationship as the airline expands its Istanbul operations and engine maintenance capabilities.

Turkish Airlines currently operates 96 Boeing 737 Next Generation aircraft powered by CFM56-7B engines and 79 Boeing 737 MAX aircraft equipped with LEAP-1B engines.

CFM said it had delivered more than 10,000 LEAP engines during the 10 years since the engine entered service, with the fleet accumulating over 100 million flight hours. The manufacturer continues to introduce upgrades, including a high-pressure turbine durability kit designed to extend time on wing and a reverse bleed system (RBS).

The agreement is expected to strengthen Turkish Airlines' long-standing relationship with CFM International and support the integration of newly ordered Boeing 737 MAX aircraft into its expanding fleet. The planned engine MRO facility will also enhance Turkish Technic's ability to provide comprehensive maintenance services.

Source: Turkish Airlines

Oman Air has entered into a codeshare agreement with Finland’s Finnair, expanding travel options for passengers flying between Oman, Europe and Australia.

The deal represents the airline’s first partnership of this nature since it officially joined the Oneworld global airline alliance in June 2025.

Under the agreement, passengers will be able to reach Helsinki via London Heathrow Airport, where Oman Air operates 11 weekly flights from its main hub in Muscat.

The partnership will also cover Finnair-operated services connecting Helsinki with Paris, Amsterdam, Frankfurt, Munich, Zurich, Milan and Rome, providing passengers with additional options for travelling between major European cities and the Finnish capital.

The agreement extends beyond Europe to Australia, with connections to Melbourne available via Bangkok. Oman Air operates two daily flights to the Thai capital, creating further opportunities for passengers travelling between the Middle East and Australia.

Rohan Patel, Head of Partnerships and Alliances at Oman Air, described the agreement as a significant strategic move towards maximising the benefits of the airline’s Oneworld membership.

He said the partnership had helped Oman Air broaden its customers’ travel options, making it easier for them to reach Helsinki and connect with destinations across Finnair’s wider network.

Source: Oman News Agency

Jazeera Airways has taken delivery of its first Airbus A320neo in Kuwait, marking the start of a major fleet expansion programme as the airline celebrates 21 years of operations.

The aircraft is the first delivery under the carrier’s order for 26 Airbus aircraft. Chief Executive Officer Barathan Pasupathi accompanied the jet on its inaugural flight, J921, from Airbus headquarters in Toulouse, France, to Kuwait.

A welcoming ceremony in Kuwait was attended by Jazeera Airways Vice Chairman Mohammad Almousa, representatives of the Kuwait Civil Aviation Authority and Ministry of Interior, as well as the airline’s management and employees.

Almousa said the decision to accept the aircraft on schedule was deliberate, despite Kuwait’s airport having been closed for two months during the year. He noted that the aircraft is owned by Jazeera Airways, financed by Kuwaiti banks and expected to consume around 20% less fuel per seat than the previous generation.

He credited the airline’s employees with maintaining operations through what he described as its most difficult year since its first flight in 2005, adding that the delivery reflected confidence in Kuwait and the airline’s workforce.

Pasupathi described the arrival as a significant milestone, highlighting the company’s commitment to long-term growth, operational resilience and the development of Kuwait’s aviation market.

He said the aircraft acquisition represented more than an addition to the fleet, reflecting the airline’s ambition to strengthen its competitive position through modern aircraft, an improved passenger experience and an expanding route network.

New Aircraft Targets Efficiency and Passenger Comfort

The A320neo incorporates Airbus technology designed to improve fuel efficiency, reduce emissions and lower noise levels compared with previous-generation aircraft.

Passenger features include lightweight, ergonomically designed RECARO seats and larger overhead baggage compartments, providing additional cabin storage and making boarding more convenient.

Jazeera Airways expects the aircraft to support operational efficiency while improving the onboard experience for passengers.

Fleet and Network Expansion Plans

The airline aims to increase its fleet to 50 aircraft by 2030 and expand its network to 100 destinations. Its plans include strengthening existing routes, adding capacity and developing further connections across its markets.

The latest delivery follows a period of significant regional aviation disruption earlier in the year, during which the airline worked to maintain and restore operations.

Jazeera Airways said its broader development strategy focuses on fleet growth, network expansion, digital innovation and continued investment in its workforce and infrastructure.

Pasupathi said each new aircraft would create additional opportunities to connect people, communities and markets. He added that further deliveries would support product improvements and a wider network.

The airline currently operates across more than 50 destinations in the Middle East, Asia, Europe and Africa. It said the new aircraft reinforces its focus on a modern and efficient fleet, accessible air travel and sustainable growth, while contributing to the development of Kuwait’s aviation sector.

Source: TradeArabia

Qatar Airways has reduced its daily flight frequency to Jeddah, Saudi Arabia, as disruptions continue to affect its services to the Kingdom.

The airline said flights to and from Jeddah International Airport (JED) have been cut from seven daily services to four.

Meanwhile, flights connecting Doha with Riyadh (RUH) and Dammam (DMM) remain suspended through October 24, 2026, inclusive.

Qatar Airways has advised passengers to contact the airline within 48 hours of their scheduled departure to confirm the latest flight arrangements, warning that schedules remain subject to change.

Travellers can also visit the airline’s official website or use its mobile app to manage bookings and access updated flight information.

Source: The Peninsula

Air India has launched a company-wide cost-cutting initiative as financial losses, airspace restrictions and high jet fuel prices add pressure to its turnaround efforts, according to an internal memo from CEO Tewolde Gebremariam to employees.

The airline has established a dedicated cross-functional team to identify savings across its operations and introduced stricter controls on spending approvals. The initiative also includes an employee programme designed to reward ideas that reduce costs or generate additional revenue.

The measures come as Air India seeks to return to profitability and rebuild confidence in its safety standards. The carrier reported a loss of more than $2 billion in the fiscal year ended March and has faced regulatory scrutiny following a fatal crash in June 2025 that killed 260 people.

In August, two people familiar with the matter told Reuters that the airline was seeking approximately $1.5 billion in fresh equity funding from its owners, Tata Sons and Singapore Airlines.

Operational Challenges Add to Financial Pressure

Air India has faced a series of operational difficulties, including safety and compliance shortcomings. These have included operating aircraft without valid certifications, while Pakistan's airspace ban and conflict-related disruptions in the Middle East have forced longer flight routes, cancellations and reductions in international services.

The airline's fleet modernisation programme has also encountered obstacles. Shortages of seats and other components have delayed cabin upgrades, while Air India is seeking to defer deliveries of hundreds of aircraft on order to manage expenditure.

These challenges confront Gebremariam as he attempts to overhaul the carrier, which has not reported a profit since returning to private ownership in 2022.

In his memo, the CEO called on employees to make cost-conscious decisions and strengthen accountability throughout the organisation. The new initiative is intended to encourage staff at all levels to identify opportunities to improve efficiency and increase revenue.

The cost-control measures form part of Air India's broader effort to manage financial pressures while addressing operational challenges and advancing its long-term turnaround plans.

Source: Reuters