London, UK – The global aviation sector experienced another shock at the start of the second quarter of 2026. Military escalations and geopolitical tensions in the Middle East disrupted international travel plans. These tensions also had a tangible economic impact on major airlines and airports worldwide.
Heathrow Airport: Significant drop in passenger numbers
London’s Heathrow Airport, one of the world’s busiest, reported a decline in passenger numbers during April.
According to Reuters, passenger traffic fell by 5% to 6.7 million.
The airport attributed the decline directly to disruptions in travel plans due to the ongoing instability. The drop was also linked to military operations related to the Iran-Iraq War, which led many travelers to cancel or postpone their trips. Additionally, passengers rerouted their flights to avoid conflict zones.
IAG Group and Financial Pressures
Financially, IAG, the owner of British Airways, faced increasing pressure, leading it to lower its profit and free cash flow forecasts for 2026. The group estimated that its fuel bill would jump by approximately €2 billion, bringing the total to €9 billion due to the sharp rise in oil prices. This is compounded by shipping costs resulting from the war.
The group explained that free cash flow, while remaining “substantial,” will be lower than the previous estimate of €3 billion. Targeted capital expenditure was also reduced to €3.5 billion, down from the previous forecast of €3.6 billion.
Confrontation strategies and market expectations
For his part, the group’s CEO, Luis Gallego, confirmed that the company is forced to take austerity measures to absorb the shock, saying: “We need to raise airfare prices to mitigate the impact of the significant increase in fuel costs, while continuing to carefully control capital expenditures.”
Gallego noted that the current market pressures, while challenging, could create opportunities to acquire struggling airlines that lack the financial strength to weather the crisis.
These moves come at a time when European airlines are resorting to extraordinary measures, including cutting spending. Furthermore, these companies are canceling unprofitable flights and rapidly phasing out older, fuel-guzzling aircraft. These measures aim to boost operational efficiency in the face of the current crisis.
