Iran war threatens global travel industry as passengers get stuck
Chinese medicine food therapist Zoey Gong was days away from boarding an Emirates flight from Paris to Shanghai via Dubai, United Arab Emirates, when the United States and Israel attacked Iran last Saturday.
Gong, 30, whose flight plans were derailed as a result, told CNBC that he had to pay $1,600 to get to Shanghai, more than double his original ticket.
He is one of millions of travelers drawn into war and other conflicts this year from Iran to Mexico, according to industry group the World Travel and Tourism Council; These issues threaten the global tourism industry, which is worth an estimated $11.7 trillion to the world economy. This suggests that people far from falling missiles, drone strikes, and other geopolitical flashpoints are not immune to the ripple effects.
‘Aviation swamp’
Stranded passengers wait with their luggage outside Hazrat Shahjalal International Airport in Dhaka on March 3, 2026, after carriers canceled flights amid conflict in the Middle East.
Münir Uz Zaman | Afp | Getty Images
The US-Israeli attack on Iran caused major aviation, travel and security crises.
More than a million people have been stranded worldwide due to airspace closures that have halted more than 20,000 flights since Saturday, according to aviation data firm Cirium. Some were stranded on cruise ships. More expensive “cancel for any reason” requests Travel insurance policies have increased 18-fold this week, said Chrissy Valdez, senior operations manager at online insurance marketplace Squaremouth.
Since the attacks on Iran on February 28, Iran has launched retaliatory attacks on Qatar, Jordan, Israel and Cyprus, as well as the United Arab Emirates, which hosts Dubai International Airport, the world’s busiest airport in terms of international passenger traffic, according to Airports Council International. The back-and-forth attacks left airlines with little recourse to repatriate passengers.
Days after the attack, the US State Department told citizens in much of the region to leave immediately as they had few options. The ministry said it will organize charter flights for US citizens who want to return from Saudi Arabia, Israel, the UAE and Qatar.
“This has become an aviation quagmire,” said Henry Harteveldt, a former airline executive and founder of travel consulting firm Atmescent Research Group.
Other sectors of the travel industry are also dealing with the impact of war. Debris rained down nearby AccorWe are at Fairmont The Palm Hotel in Dubai for the weekend. The company said four people were injured, but none were guests, visitors or staff. Meanwhile, a fire broke out at the iconic Burj Al Arab hotel earlier this week after it was hit by debris from an Iranian drone.
(From left) Maltese flagged cruise ships Aroya Manara and MSC Euribia docked in Dubai port on 4 March 2026.
Giuseppe Cacace | AFP | Getty Images
It was stated that MSC Cruises’ MSC Euribia ship, with a capacity of more than 6,300 passengers, was stranded in Dubai and the company was trying to arrange flights for the affected guests. In the statement made by the company, it was said: “We demand priority from our partners for our guests.”
“We are working on other options to expedite repatriation, such as chartering flights from Dubai, Abu Dhabi, UAE or Muscat, Oman, but the situation on board remains calm,” the cruise line said.
Earlier this week, MSC announced that it would cancel its remaining sailings from Dubai for the winter. “We realize this will be disappointing, but we are confident that affected guests will understand this decision,” he said.
Putting aside the Covid-19 health crisis that has brought most international travel to a halt, Harteveldt described this week as: “Frankly the most chaotic event we’ve seen since 9/11, when the US chose to close its airspace. We’ve never seen anything that had such a prolonged and geographically widespread impact on travel.”
global conflicts
Flightradar24 maintains flight traffic in the Middle East on March 4, 2026.
Source: Flightradar24.com
The Iran war is the most violent military conflict of this year; But it is one of a number of hurdles that threaten travel demand and profits of hotels, airlines and cruise companies, as well as local economies that are heavily dependent on travel, especially international tourists who tend to spend more than local visitors.
Then in February, flights were grounded in parts of Mexico, including the coastal resort city of Puerto Vallarta and Guadalajara, after violence broke out after the Mexican military killed a cartel leader.
Executives have already had to make costly changes: rerouting or canceling flights, implementing flexible booking and refund policies, grounding planes and changing flight plans entirely or discounting hotel rooms.
The costs of these conflicts, including fuel, one of cruise lines’ and airlines’ biggest expenses alongside labor, are still being calculated and often passed on to consumers, but signs are emerging about how customers will be affected.
First: More expensive tickets and accommodations are on the cards.
Higher airfare
United Airlines Jet fuel prices, which have risen 60 percent since the United States and Israel first attacked Iran last week, will achieve first-quarter results if not second-quarter results, CEO Scott Kirby said Thursday. This will likely quickly translate into higher airfares, he added.
Bookings for United flights to places like Australia have increased as it offers different routes to the U.S., it said, according to a securities filing, with few flights operating in the Middle East despite higher fuel costs accounting for 20% of United’s operating expenses last year.
Speaking outside an event at Harvard University, Kirby said demand had remained generally resilient since the conflict began.
Airlines around the world have been forced to use longer and more costly routes due to airspace closures.
Australian airline Qantas, for example, told CNBC that its flight from Perth, Australia, to London will now follow a route that requires refueling in Singapore, but that will also allow it to pick up about 60 more passengers.
Best year ever?
Passengers look at departure screens showing canceled flights to Puerto Vallarta at Benito Juarez International Airport after authorities stepped up security following roadblocks and arson attacks by organized crime in several states, following a military operation that a government source said killed Mexican drug lord Nemesio Oseguera, known as “El Mencho,” in the Mexican state of Jalisco on Feb. 22, 2026.
Luis Cortes | Reuters
Travel managers started 2026 as they often do: optimistic. Some airline executives, including those of the most profitable U.S. airlines, Delta Airlines and United are forecasting record earnings to be achieved this year.
The war and other events erupted as the travel industry turned to premium options to woo wealthier customers, who accounted for a larger share of overall spending. Losing base for more expensive trips could be extra disadvantageous for these companies and local economies.
For example, in Mexico, tourism accounts for nearly 9% of total income. economy According to the country’s Ministry of Tourism, the number of international tourists rose 13.6% last year to 98.2 million people, spending close to $35 billion.
Airlines are now discouraging travel from the United States to Puerto Vallarta, at least in the near term. Delta cut routes to the city from April 3 through the end of the month, except for once-daily flights from Los Angeles and Atlanta, according to Cranky Network Weekly, a newsletter covering the airline industry’s network changes. Alaska Airlines And Southwest Airlines We cut off the service in March.
“Maybe people will forget about PVR [Puerto Vallarta International Airport] “There are now concerns that headlines will shift to the Middle East and bookings will rebound, but we’ll be watching capacity changes as leading indicators,” newsletter authors Brett Snyder and Courtney Miller said in the March 1 issue.
Smoke rises amid a wave of violence that has blocked highways in more than a half-dozen states with burned vehicles and gunmen following a military operation that a government source said killed Mexican drug lord Nemesio Oseguera, known as “El Mencho,” on Feb. 22, 2026, in Puerto Vallarta, Jalisco, Mexico.
@morelifediares via Instagram | Reuters
The latest numbers also come three months before the FIFA World Cup, which is scheduled to be hosted by cities in Canada, Mexico and the United States.
Some hotels in Mexico are also starting to notice a change.
Victor Razo, manager of the Rivera del Rio hotel in Puerto Vallarta, told CNBC that bookings are down about 10% from last year.
“Given what’s going on, we’ve had some promotions,” he said, adding that it has reduced rates by 10% to 20% ahead of the busy spring holiday and Holy Week period next month.
He added that the hotel was nowhere near problems, including road closures, and bookings had since stabilized.
“It’s not like the beginning of the epidemic,” he said. “There is no comparison.”
