Gordon Smith

Airlines are running a high-stakes race: can revenues keep pace with soaring fuel costs, or will the balance tip as we head into Q2?

Between insurance hurdles and tight capacity controls, the line between “can’t fly” and “won’t fly” in this complex operating environment is becoming increasingly blurred.

Fuel accounts for roughly 20–30% of an airline’s operating costs—so when prices surge, the impact can be immediate and significant.

In the last 24 hours, two of the three biggest Gulf carriers have eased loyalty rules. A simple case of looking after the customer or a sign that disruption may outlast current recovery timelines?

This bold approach reduces operational complexity and resets customer expectations, but also suggests that carriers see instability in the region lasting well beyond the immediate crisis window.

Cathay Pacific has come full circle. After losing about $4 billion during the pandemic years, the Hong Kong carrier has earned roughly the same amount back over the past three – its best run of profitability in decades. Can Cathay sustain its momentum – or will the next cycle look very different? We examine the outlook in this week’s feature story.

At the start of 2026, airlines were broadly optimistic. Demand looked strong, fuel prices were manageable, and last year’s tariff worries eased. Then the global outlook shifted again. The Iran war has shuttered Gulf hubs, pushed oil prices sharply higher, and raised fresh questions about the global economy. The result could be a troubling convergence of risks for the airline industry. In this week’s feature story, we examine four shocks the sector may now be facing.

As a nightmare week for Gulf airlines drags on, Lufthansa Group CEO Carsten Spohr argues Europe must reduce its reliance on Middle East hubs to connect with the world.

Turkish Airlines is dialing back the pace of expansion – shifting toward profitability and network quality while still pursuing its global ambitions ahead of the carrier’s 2033 centenary.

In a week when the world's busiest international airline ground to a halt and Gulf hubs faced aerial attack, Gordon and Jay explore the impact of the Iran war on the aviation industry.