Asian airlines that benefited from disrupted Middle East air travel during the Iran conflict are beginning to lose their competitive advantage as major Gulf carriers restore operations and attract travellers back with lower fares, according to industry data.
Carriers including Singapore Airlines, Cathay Pacific Airways, Korean Air, and ANA Holdings experienced stronger passenger demand and higher ticket prices on Europe-bound routes after Gulf airlines were forced to reduce services when regional tensions escalated. However, that trend is gradually reversing as Emirates, Qatar Airways, and Etihad Airways return to near-normal operations.
Nathan Gee, Head of Asia-Pacific Transportation Research at BofA Global Research, said the strongest gains in seat occupancy for Asian airlines have likely already passed. While he noted that long-haul bookings are typically made up to six months in advance, allowing revenue benefits to continue into upcoming quarters, he suggested the peak improvement in load factors has already occurred.
Before the conflict, Emirates, Qatar Airways, and Etihad Airways carried nearly one-third of passengers travelling from Asia to Europe and more than half of travellers flying from Australia and New Zealand to Europe, according to Cirium data.
Following the outbreak of the Iran war on February 28, drone and missile attacks forced the temporary closure of major Gulf hub airports. By mid-June, flight activity had recovered to approximately 90% of normal levels, based on Flightradar24 tracking data.
Figures from the International Air Transport Association (IATA) show that Middle Eastern airlines reduced their year-on-year passenger decline from nearly 60% between March and May to 28%. During the same period, year-on-year growth in non-stop flights between Asia and Europe slowed significantly, easing from almost 30% in March to 15% in May.
Passenger confidence returns
Traveller confidence has also improved. In June, Australia removed its "do not travel" advisory covering Gulf transit hubs, restoring travel insurance validity for passengers using those airports. Flight Centre Travel Group reported a 36% increase in bookings with Emirates, Qatar Airways, and Etihad Airways during the following week.
Michael Schischka, Senior Adviser at Mary Rossi Travel in Sydney, said many customers who had booked refundable backup flights with Asian airlines during the conflict are now returning to Gulf carriers as security concerns ease.
He added that most travellers now feel more comfortable transiting through the Middle East, while heavily booked Asian services and limited availability of discounted fares have also encouraged passengers to switch back to Gulf airlines.
Airline data signals gradual shift
Korean Air said its European routes recorded higher load factors between March and May compared with the previous year. However, the airline acknowledged that transfer passenger demand weakened as Gulf carriers steadily resumed operations during the second quarter.
ANA reported that its European load factor declined from 93.1% in March to 86.9% in April, although it remained 8.7 percentage points above the same period last year. Cathay Pacific also recorded slowing momentum, with its network-wide load factor rising to 86.8% in May, up two percentage points year-on-year, compared with a 9.5-point increase to 92.2% in March.
Independent aviation analyst Brendan Sobie said the figures indicate a steady market rebalancing rather than a sudden reversal. He pointed to Singapore Airlines as another example, noting that its Europe load factor increased by 13.8 percentage points in March before slowing to 4.9 points in April and just 1.1 points in May.
According to Sobie, passenger demand on both European and Australian routes had largely returned to normal levels by May after the sharp increases recorded earlier in the conflict.
Despite the recovery, some travellers remain cautious. Cherie Lavin, a travel agent with Travel My Dear in Brisbane, said customers planning trips within the next one to three months are still hesitant about booking with Middle Eastern airlines. However, she added that clients planning travel for next year are showing far greater confidence and are responding positively to Gulf carrier options.
Source: ZAWYA