The impact of the crisis in the Middle East on European airlines

The Iran crisis has been, on the whole, negative for European airlines. But some have had a tailwind, thanks to travelers between Europe and Asia who avoid the hubs of the Middle East and choose to stopover in Frankfurt or Helsinki.

Finnair, which is listed but controlled by the Finnish government, is an example: it has developed an efficient hub to and from Asia, which accounted for almost two-fifths of its capacity in 2025. The obvious competition on many of these routes includes large Gulf firms such as Emirates and Etihad. Finnair has benefited from the war: revenue from its Asian routes grew 20% year-on-year in the second quarter, a sign of strong demand. And it has risen more than 30% on the stock market. She's not the only one. The stocks of IAG, Air France-KLM and Lufthansa have also outperformed their short-haul rivals this year. Cargo is another positive point: Lufthansa's corresponding division grew by almost 60% year-on-year in the second quarter.

Not everything has been a bed of roses. See Turkish Airlines. They seemed a possible beneficiary of the Gulf's problems. Istanbul recently snatched the title of Europe's busiest airport from Heathrow. Even so, Turkish Airlines estimates the net negative impact of the war at around $900 million in the first half, as the increase in sales was not enough to offset factors such as the rise in the cost of fuel and disruptions to its routes.

Then there is the question of how long this will last. Tim Clark, president of Emirates, said in July that the company was flying at 90% capacity and that premium cabins were full. Barclays analysts have also been skeptical about the duration of this boom, arguing in early July that passengers' "short memory" and the high quality of service from Gulf airlines would keep them coming back. Finnair chose not to raise its operating profit forecast when presenting its half-year results, despite raising its revenue forecast.

On the other hand, IATA data shows that passenger traffic between Europe and Asia grew 12.1% year-on-year in July, the strongest expansion of all major international routes. At least for now, European airlines can enjoy the Asian tailwind.