Airlines worldwide are adjusting ticket prices and scaling back flight capacity in response to a sudden spike in oil prices, a shift that could test the industry’s profitability if higher travel costs discourage passengers.

Prior to the escalation of the U.S.-Israeli conflict involving Iran last month, the aviation sector had projected record profits of $41 billion for 2026. However, a sharp increase in jet fuel costs—reportedly doubling in recent weeks—has disrupted those expectations, prompting carriers to reassess their operations and route networks.

Major airlines, including United Airlines, Air New Zealand, and Scandinavian Airlines, have already announced capacity reductions alongside fare increases. Others have introduced or expanded fuel surcharges to offset rising expenses.

Industry experts warn that airlines are facing conflicting pressures. Rigas Doganis, former head of Olympic Airways and a past director at easyJet, described the situation as a “perfect storm,” noting that carriers may need to lower fares to stimulate weakening demand even as higher fuel costs push them in the opposite direction.

The sector had enjoyed a strong recovery in 2025, with global passenger traffic reaching levels approximately 9% above those seen before the COVID-19 pandemic. Robust demand and supply-chain constraints, particularly delays in aircraft deliveries, had allowed airlines to maintain high seat occupancy and exert pricing power.

However, the scale of fare increases required to offset fuel costs could prove challenging, especially as households face higher gasoline prices that may limit discretionary spending on travel.

Analysts suggest capacity reductions may be the primary tool airlines use to support pricing. Andrew Lobbenberg, head of European transport equity research at Barclays, said cutting available seats is often the most effective way to drive fares higher during periods of crisis.

Airlines have already begun signaling the extent of potential fare hikes. The chief executive of United Airlines, Scott Kirby, recently indicated ticket prices may need to rise by around 20% to cover fuel costs.

Meanwhile, Cathay Pacific has increased fuel surcharges twice in the past month. From Wednesday, passengers flying return economy routes between Sydney and London will face an additional $800 surcharge, compared to a typical pre-crisis fare of about A$2,000 ($1,369.60).

Low-cost carriers are expected to be particularly vulnerable, as their customer base tends to be more sensitive to price increases. Analysts note that some travelers may shift to alternative transport options, such as rail or bus services, especially for short-haul journeys.

The current পরিস্থিত represents the fourth major oil shock for the aviation industry since the early 2000s. Previous disruptions occurred during the 2007–2008 pre-financial crisis period, following the Arab Spring in 2011, and after the outbreak of the Russia-Ukraine war in 2022.

This time, additional concerns have emerged over fuel supply security, particularly due to the closure of the Strait of Hormuz, a critical energy transit route. Airlines such as Vietnam Airlines have raised concerns about access to physical fuel supplies.

While airlines have sought to improve efficiency by modernizing fleets, supply-chain disruptions and technical issues with next-generation aircraft engines have delayed deliveries, limiting their ability to reduce fuel consumption.

Industry consolidation in the United States over the past decade has also reshaped the sector, with mergers such as Delta-Northwest and American Airlines-US Airways reducing the number of major carriers and enabling tighter capacity management. Meanwhile, low-cost operators like Ryanair and IndiGo have focused on streamlined fleets and rapid turnaround times to control costs.

According to aviation consultancy IBA, the current crisis is likely to widen the gap between stronger and weaker airlines. Companies with solid financial reserves and access to capital are expected to better withstand prolonged cost pressures, while those with weaker balance sheets may face growing financial strain.

Source: ZAWYA

Dubai Aviation City Corporation (DACC) has awarded a contract to develop an automated people mover (APM) system for the first phase of Al Maktoum International Airport, creating what is expected to be the world’s largest airport transit system of its kind.

The contract was awarded to a consortium comprising Japan’s Mitsubishi Heavy Industries (MHI), its Dubai-based subsidiary MHI Mobility Engineering Services (MHI-MESC), and Indian engineering group Larsen and Toubro (L&T).

The APM network will extend approximately 50 kilometers and connect nine stations, making it significantly larger than existing airport people-mover systems.

MHI and MHI-MESC will oversee the design, procurement and testing of 165 vehicles, as well as signaling technology and overall system integration. L&T will be responsible for designing, procuring, testing and constructing the remaining subsystems on site.

The project is scheduled for completion in December 2031.

The scale of Dubai’s planned system will surpass existing airport transit networks, including the approximately 8-kilometer Skylink at Dallas Fort Worth International Airport and The Plane Train at Hartsfield-Jackson Atlanta International Airport.

The APM network will connect Al Maktoum International Airport’s terminals and key facilities, helping improve passenger movement, reduce transfer times and support efficient airport operations.

The project forms part of Dubai’s broader plans to develop Al Maktoum International into one of the world’s largest aviation hubs. The airport is targeted to begin operations in 2032 and is ultimately expected to handle up to 260 million passengers annually.

The planned expansion is designed to accommodate growing regional and international air traffic while strengthening Dubai’s position as a major global aviation hub.

Source: Khaleej Times

Skyway Aviation Handling Company PLC (SAHCO) has reaffirmed its commitment to strengthening cooperation with the Nigeria Customs Service (NCS) to improve the efficiency, security and smooth operation of airport and cargo activities.

The commitment was made during a SAHCO delegation’s visit to AC Adamu, the newly appointed Commander of the Customs Intelligence Unit (CIU) at Murtala Muhammed International Airport (MMIA) in Ikeja, Lagos.

The visit focused on building on the existing relationship between SAHCO and the NCS through stronger communication, closer coordination and enhanced operational cooperation, particularly in the handling and movement of cargo.

Representing SAHCO Managing Director and CEO Adenike Aboderin, General Manager of Cargo Services Donald Adekunle welcomed the new CIU commander and pledged the company’s continued support for a professional and productive partnership with the Customs Service.

Adekunle said closer cooperation between the two organizations would help strengthen airport operations and improve coordination among key aviation stakeholders and government agencies.

He also emphasized the importance of inter-agency collaboration in facilitating efficient cargo movement, reinforcing security procedures and enhancing service delivery across Nigeria’s airports.

The renewed cooperation comes as aviation and government agencies continue to focus on improving cargo-handling processes and maintaining secure and efficient airport operations.

Source: ZAWYA

SHARJAH, UAE: Sharjah Airport has achieved Level 3 Airport Customer Experience Accreditation from Airports Council International (ACI), marking another milestone in its efforts to strengthen passenger services.

The airport first received Level 1 accreditation in 2022 before advancing to Level 2 in 2023 after establishing and implementing a customer experience strategy across its departments. It renewed its Level 2 status in 2025 and progressed to Level 3 in 2026.

Ali Salim Al Midfa, Chairman of Sharjah Airport Authority, said the latest accreditation reflected the airport’s focus on passenger satisfaction and its broader strategy to provide an integrated travel experience centered on quality and service excellence.

He said the achievement also supports Sharjah’s ambitions as a destination for travel, tourism and business.

According to Al Midfa, reaching Level 3 demonstrates the airport’s ability to collect and analyse passenger feedback and work with airport partners to turn that information into practical service improvements.

The accreditation assessment examined how the airport gathers and applies passenger feedback, coordinates with service providers and maintains a seamless passenger experience from arrival through departure.

As part of its progress toward Level 3, Sharjah Airport strengthened its customer feedback systems to better identify passenger expectations, pinpoint areas requiring improvement and respond more quickly to concerns.

The airport also increased coordination with airlines, ground-handling companies and other stakeholders to promote consistent service standards throughout the passenger journey.

Passenger satisfaction reports are now regularly distributed among airport departments, allowing teams to identify successful practices as well as areas requiring further attention. Employees across the airport community are also involved in improving passenger services, reinforcing shared responsibility for the overall travel experience.

ACI established its Airport Customer Experience Accreditation Programme to help airports assess and enhance passenger experience. The programme provides tools and expertise to help airports manage passenger journeys, develop improvement plans and identify opportunities to raise service quality.

Source: QCAA

DOHA, Qatar: Hamad International Airport (HIA) has reaffirmed its readiness to provide a smooth and comfortable arrival experience as passenger numbers increase in Doha following the summer holiday season.

In a statement issued Tuesday, the airport said it expects higher inbound traffic this August as students and families return ahead of the new academic year.

HIA has issued a series of guidelines designed to make arrival procedures easier and improve passenger convenience. Airport staff will remain available around the clock to assist travelers and their families, it said.

The guidance covers several aspects of the arrival process, including procedures for families traveling with young children and arrangements for meeting arriving passengers.

It also provides information on transportation options from the airport, including ride-hailing services, taxis, buses and the Doha Metro. Guidance on car rentals and baggage collection is also included.

The airport said the measures are intended to help passengers navigate the arrival process efficiently during the expected increase in traffic.

With August marking a key period for post-holiday travel, HIA is emphasizing operational preparedness and passenger support as more travelers return to Doha.

Source: QNA

JEDDAH, Saudi Arabia: King Abdulaziz International Airport in Jeddah handled approximately 28.55 million passengers on 169,900 flights between the beginning of 2026 and the end of July, according to an airport performance report.

The airport also processed 33.6 million bags during the seven-month period, the Saudi Press Agency (SPA) reported.

The performance report was reviewed by Deputy Governor of Makkah Region Prince Saud bin Mishaal bin Abdulaziz during a meeting attended by Jeddah Airports Company CEO Mazen Johar.

The airport recorded its highest daily passenger traffic on January 17, when around 195,300 passengers passed through its facilities.

During the 1447 AH Umrah season, King Abdulaziz International Airport served approximately 6.16 million passengers on 36,400 flights and handled 7.2 million bags. More than 10,000 employees from various agencies were deployed at the airport during the season.

The report also highlighted the airport’s role during the 1447 AH Hajj season. More than 1.67 million pilgrims traveled through the airport during the arrival and departure phases, with more than 9,600 flights operated and approximately 2.76 million bags handled.

Ground transportation also played a significant role in moving pilgrims during Hajj. Buses carried around 821,700 pilgrims across 22,855 trips, while the Haramain High Speed Railway transported approximately 48,200 pilgrims on 207 trips.

The figures underscore the airport’s importance as a major gateway for pilgrims traveling to Saudi Arabia for Umrah and Hajj, as well as its role in handling growing passenger demand throughout the year.

Source: TradeArabia