Airlines Extend Flight Suspensions, Refund Fares Into July as Middle East Tensions Persist
Major airlines have extended widespread flight suspensions across the Middle East, with passengers facing cancellations and refunds stretching into July, as geopolitical disruptions continue to affect global travel.
High-level talks between the United States and Iran collapsed on April 12 after more than 21 hours of negotiations failed to produce an agreement. U.S. Vice President JD Vance, who led the American delegation alongside special envoy Steve Witkoff and adviser Jared Kushner, said Iran rejected key conditions related to its nuclear programme and long‑term security guarantees. Iranian officials described Washington’s demands as unreasonable.
The breakdown follows a fragile two‑week ceasefire declared on April 8. President Donald Trump had earlier threatened military strikes unless Iran reopened the Strait of Hormuz. Tehran agreed to reopen the waterway under a temporary truce, prompting Washington to stand down planned operations. However, Israeli military activity in Lebanon remains a point of contention, with Iran insisting it be included in any agreement, a position not shared by the U.S. and Israel.
The uncertainty has severely hit regional aviation and tourism. According to aviation analytics firm Cirium, more than 30,000 flights into and out of the Middle East have been cancelled since late February.
Lufthansa Group has halted services to several key destinations, including Dubai and Tel Aviv, until May 31, and extended suspensions to Abu Dhabi, Riyadh, and Tehran through October. Aegean Airlines, Air Canada, British Airways, Delta Air Lines, and airBaltic have announced similar disruptions across multiple routes, citing safety concerns.
The cancellations have stranded hundreds of thousands of travellers, forcing airlines to process large‑scale refunds well into the summer. Industry estimates put daily losses for the Middle East travel sector at nearly $600 million.
The ripple effects extend beyond aviation. Hotel occupancy in Dubai has dropped sharply, and expatriates have begun leaving in noticeable numbers. Real estate markets across the Gulf have also suffered. Data from Goldman Sachs shows transaction volumes in the United Arab Emirates fell 51 percent in early March compared to February, a sharper decline than during previous regional conflicts.
Emaar Properties, one of the UAE’s largest developers, has seen its share price fall nearly 40 percent since the crisis began, while Dubai’s real estate index has shed about 30 percent in just two weeks.
Analysts note that while Gulf economies struggle, other regions could benefit from diverted tourism flows. Nigeria has been identified as a possible alternative destination. However, security concerns persist. On April 8, the U.S. State Department authorised the voluntary departure of non‑emergency personnel and their families from its embassy in Abuja, citing a deteriorating security environment. Nigeria remains under a Level 3 “Reconsider Travel” advisory, with “Do Not Travel” warnings expanded to 23 states.
Nigerian authorities have downplayed the move, describing it as precautionary. Nevertheless, the timing has reinforced caution among foreign tourists and investors.
As instability reshapes global travel patterns, the crisis underscores how geopolitical tensions can rapidly disrupt aviation, tourism, and investment flows, leaving both established and emerging markets navigating complex risks.