Flight cancellations soar and travel retail concerns rise as Middle East crisis escalates

MIDDLE EAST. The US overnight military strikes on Iranian nuclear sites have dramatically intensified a Middle East crisis already at boiling point as the Israel-Iran conflict enters its second week, writes Martin Moodie.

Events are unfolding at such rapid pace that we will leave any updates and analysis to mainstream media. Our role is to assess the impacts of the conflict on the aviation, tourism and travel retail markets and already it is clear that these sectors face a serious, escalating and potentially sustained downturn.

Just eight days ago I described how the conflict between Israel and Iran raised the very real threat of a wider regional war. That threat level has just been raised several notches.

I noted in the column that my travel retail working career has embraced two major conflicts in the Middle East – the so-called Gulf Wars of 1990-91 and 2003-2011. Many industry stakeholders will recall the profound repercussions both had on the travel retail sector.

As the political situation deteriorates – where now for any negotiations? – our industry must start to count the cost, both short and longer term, and react accordingly. The X feed from FlightRadar24 and the mainstream media headlines below collectively underline the early impact on aviation.

Following US attacks on Iranian nuclear facilities, commercial traffic in the region is operating as it has since new airspace restrictions were put into place last week.

Image from 01:45 UTC 22 June. pic.twitter.com/IeJBa9kvF4

— Flightradar24 (@flightradar24) June 22, 2025

US airlines face heightened risks as global carriers bypass Middle East after attacks on Iran – Reuters

Etihad extends flight cancellations as Israel-Iran tensions rise – Gulf News

Airlines keep avoiding Middle East airspace after US operation in Iran – Arab News

British Airways Gulf flights cancelled and diverted after Trump strikes Iran and tension mounts – The Independent

Etihad, Emirates, Qatar, Turkish, Saudia and More Face Around 400 Flight Delays and Cancellations at Dubai, Doha, Amman, Istanbul, and Sharjah Airports Amid New Regional Travel Chaos Triggered by Escalating Israel Iran Tensions – The Independent

As noted in my last report, the Middle East includes some of travel retail’s key operations, including Dubai International Airport which, anchored by Dubai Duty Free (DDF), ranks as the world’s biggest single airport retail location.

I was in Dubai last week and already the number of flight cancellations by Emirates and flydubai was having a rising negative impact on previously burgeoning sales. British Airways today cancelled flights to the UAE and Qatar after the US attacks.

As an aside, it is salient to repeat my earlier comment that the crisis – now much greater – comes at a pivotal time for DDF as talks involving several outside parties regarding investment reach an advanced stage.

How will the now very real prospects of prolonged regional instability dampen external appetite to be involved in such a blue-chip operation as DDF?

But it’s not just Dubai being affected. Middle East airports comprise a mix of transit and point-to-point traffic and both, as the headlines above reflect, are being adversely impacted.

Fortunately summer is not tourist season in popular destinations such as Abu Dhabi, Dubai, Israel, Jordan, Oman, Qatar and Saudi Arabia.

Travel ecosystem stakeholders in all those markets will be desperately hoping that peace will have prevailed long before peak holiday season arrives. But with the likelihood of an Iranian response and the full-blown Israel/Palestine crisis still raging, those hopes may be compromised.

Business travel to and from the region is already suffering. Multiple major brand houses have suspended travel to, from and within the Middle East and that number seems certain to soar after the US attack.

One leading Middle Eastern travel retailer confirmed to The Moodie Davitt Report that, effective today, its management are not allowed to fly until further notice. Not only is a duty of care involved, the source said, but there is a very real chance of staff being stuck abroad in the event of airspace being closed.