Analysis: Outlook for the year still clouded by Gulf conflict

The short-term impact of the Gulf crisis on travel is becoming clearer but its extent by the time there is any sort of medium-term stability remains impossible to predict.

As the head of European airports association ACI Europe, Olivier Jankovec, put it last week: “Past the peak summer months, the traffic outlook is a black box. It hinges on geopolitics and the fallout of the oil crisis.”

The US war on Iran could resume at any moment. US President Donald Trump announced this week that he had suspended a military attack scheduled for Tuesday at the request of US allies in the Middle East – hardly a promising sign of peace. The president warned last week “the clock is ticking” on any deal.

The easyJet group reported a headline first‑half loss before tax of £552 million today (Thursday), for the six months ending March 31, compared with a headline loss of £394 million in H1 2025. It excludes £25 million of unexpected additional fuel costs incurred in March due to the sudden impact of the Middle East conflict and a £32 million net increase in legal provisions across a number of historic cases.

EasyJet said the H1 result was in line with its April trading statement and noted that it intends to operate “the full summer schedule on sale”.

Tui gave an upbeat account of its half-year results to the end of March last week, describing it as a “strong first half” which “provides momentum for a challenging second half”.

Yet the group reported booked revenue for the summer in its tour operating division down 7% year on year overall and 10% down in the UK. Tui blamed “the impact of the Iran war [and] a shift in customer demand from eastern to western Mediterranean destinations, with customers demonstrating increased caution and booking closer to departure dates” and confirmed it had cut capacity by 4%.

However, chief executive Sebastian Ebel noted short-term bookings “are extremely strong” and insisted: “This gives us the confidence this year is not lost.”

Additional costs of €40 million due to the war did not stop Tui reporting a 17% improvement in first-half losses year on year to €292 million.

However, most of the pain is yet to come despite chief financial officer Mathias Kiep’s assertion that “we can successfully offset the financial burdens from the war in Iran”.

Ryanair was more bullish on its prospects when reporting full-year results to March on Monday, despite “economic uncertainty due to the Middle East crisis and the fact that “we still don’t know when the Strait of Hormuz will reopen”.

It noted jet fuel prices “have spiked” but insisted “demand remains robust, although the booking window is closer-in than last year,” and reported: “Europe remains relatively well supplied with jet fuel, with significant volumes sourced from West Africa, the Americas and Norway.”

Ryanair reported average fares rose 10% year on year but noted: “Pricing in recent weeks has eased somewhat in response to economic uncertainty...fear of fuel shortages and the risk of inflation adversely impacting consumer spending.”

ACI Europe reported European air passenger traffic grew almost 4% year on year in March despite the war launched on February 28.

Looking to the summer peak, director-general Jankovec declared: “We do not, for now, expect a contraction of passenger volumes, unless we end up facing significant jet fuel shortages.”

Unfortunately, all forecasts remain conditional.