分类： business

The February 28, 2026 escalation of military conflict between the US, Israel and Iran triggered a cascading crisis that has reshaped the global aviation industry, with the Gulf region at its epicenter. Following US-Israeli air strikes on Iranian territory, Iran launched retaliatory attacks targeting locations near US military installations across the Gulf, including sites in Qatar and the United Arab Emirates (UAE). Among the hit sites were key international airports: Dubai International, the world’s busiest hub for international passenger traffic, as well as airports serving Abu Dhabi, Kuwait City and Manama, Bahrain. In response to immediate safety risks, the UAE, Qatar, Bahrain and Kuwait moved quickly to close their entire airspaces to commercial traffic. While these airspaces were gradually reopened over the course of a week as hostilities de-escalated, the conflict left long-lasting damage to regional and global aviation that persists months later.

Industry data from the International Air Transport Association (IATA) illustrates the severity of the financial damage. In its June 2026 outlook, IATA projected that a projected $7.2 billion net profit for Middle Eastern-based airlines in 2026 would reverse to a $4.3 billion net loss, a stunning swing driven entirely by conflict-related disruption.

While major Gulf flagship carriers including Emirates, Etihad Airways and Qatar Airways have resumed commercial operations, none have returned to pre-conflict capacity. Emirates CEO Tim Clark confirmed in a June interview with the *Financial Times* that the airline is currently operating at only 75 percent of its pre-conflict flight schedule. In contrast, nearly all major European and Asian carriers have kept their flights to the region suspended, with staggered restart timelines stretching into late 2026 and early 2027. Air France plans to resume services in late August, Lufthansa in September, and British Airways, Cathay Pacific and Singapore Airlines have targeted late October for resumptions. Air Canada has gone further, announcing it will not restart regional services before mid-January 2027, and dozens of other global carriers have yet to announce any restart date at all.

Even after formal reopening, regional airspaces continue to face intermittent closures and unplanned disruptions. The European Union Aviation Safety Agency (EASA) latest public bulletin, published in August, continues to advise all commercial operators to avoid the airspace of Bahrain, Kuwait, Qatar, the UAE and portions of the Gulf of Oman through August 31, 2026. This ongoing caution has drastically limited travel options for passengers. For example, a one-week round-trip ticket between the UAE and London in September currently only has three available options: Emirates to Dubai, Etihad to Abu Dhabi, and Air Arabia to Sharjah. On matching dates between Doha and Tokyo, Qatar Airways is the only operating carrier available to book.

The conflict poses an existential threat to the core business model that has powered Gulf aviation’s rise over the past three decades: the hub-and-spoke system that leverages the region’s strategic geographic location between Europe and Asia to connect passengers between the two continents via a central Gulf hub. This model has long allowed Gulf carriers to offer connecting routes that are either unavailable via direct flights or cheaper than non-stop alternatives. But the conflict has exposed critical vulnerabilities in this system.

Naveed Kapadia, an aviation lecturer at Buckinghamshire New University, explained that while temporary reduced competition from suspended international carriers has allowed large Gulf airlines to capture incremental local market share and hold fares steady, their business model remains deeply vulnerable. “Gulf airlines are connecting carriers whose economics depend on moving large volumes of passengers efficiently through Dubai and Doha,” Kapadia told Middle East Eye. IATA data from June bears this out: regional passenger demand is down 13.9 percent year-over-year, while direct traffic between Europe and Asia has jumped 11 percent as carriers reroute to avoid Gulf airspace, creating immediate strain on Gulf hub operations.

This rerouting creates cascading cost increases across all operations. Flights that are forced to take longer, less efficient routes burn more jet fuel, require longer crew duty periods, and reduce overall aircraft utilization. The extra fuel carriers now carry as a buffer against unexpected airspace closures also directly cuts into the number of passengers or amount of cargo that can be carried on each flight. The hub-and-spoke model’s concentration of traffic through a single central hub also makes the entire network far more susceptible to cascading disruptions: a single grounded aircraft or stranded crew can trigger delays and cancellations across the entire global route network.

To rebuild passenger confidence and win back pre-conflict traffic, major Gulf carriers have rolled out unprecedented customer incentives. Emirates, the region’s largest carrier, introduced a new travel insurance policy that offers full coverage for flight cancellations related to conflict, a break from standard industry practice that typically excludes war-related disruption from coverage. If flights are canceled due to renewed hostilities, Emirates guarantees it will arrange repatriation for passengers on partner airlines if it cannot operate its own. “We would get you back irrespective [of whether it’s] on Emirates or not,” Clark told the *Financial Times*, framing the policy as a commitment to passenger safety. Beyond airline-specific incentives, Dubai’s tourism authority has launched broader campaigns to revive visitor numbers, offering complimentary travel packages for guests invited by Emirati citizens and free hotel stays for passengers on long connecting layovers.

The crisis has not been limited to passenger aviation: regional air cargo and private jet operations have also seen steep declines. Kapadia noted that regional air cargo demand grew only 5.6 percent year-over-year, roughly a third slower than the global industry average of 8.5 percent. IATA data shows traffic between Europe and the Middle East remains 41.1 percent below 2025 levels, while traffic between Asia and the Middle East is down 4.1 percent. While disruption to maritime shipping through the Strait of Hormuz has created new demand for air freight for urgent, high-value and time-sensitive shipments, Kapadia said this has not translated to a straightforward gain for Gulf cargo carriers, which collectively handle roughly 13 percent of global air cargo traffic. “The more important question is whether they can convert short-term urgency into sustained and profitable cargo flows,” he added.

Private jet activity originating in Gulf countries has also collapsed. Data from aviation analysts WINGX shows that as of August 10, total private jet traffic from Gulf nations was down 46.5 percent compared to pre-conflict levels. “The vast majority of flights stayed within the Middle East region, and volumes there are still down considerably,” said WINGX analyst Nick Koscinski. Gulf-to-Europe private flights, the second most popular route category, are down 40 percent year-over-year. Koscinski noted that Qatar Executive, one of the region’s largest private jet operators, has been more resilient than competitors based in the UAE or Saudi Arabia: its total traffic is only down 6.7 percent since the conflict began, compared to a 28.7 percent drop for a comparable UAE-based operator and a 39 percent drop for a leading Saudi operator. While private jet operators can often pass increased fuel costs through to customers via surcharges, Koscinski said lags in repricing and overall softer demand mean all regional private jet operators will still take a significant financial hit.

Jet fuel prices, a core input for all aviation operations, have remained far above pre-conflict levels despite temporary declines. Kapadia said prices fell 20 percent in June after Gulf oil flows temporarily stabilized, but remained 45.8 percent higher than June 2025. IATA forecasts that the 2026 average jet fuel price will be 70 percent higher than the 2025 average. Kapadia expects airfares in the region will remain elevated and volatile rather than rising uniformly: “Airlines will try to recover higher fuel and disruption costs through fares to some extent, but they cannot pass on every additional cost without weakening demand, particularly among price-sensitive leisure travellers.”

Low-cost carriers around the world have been hit hardest by the spike in fuel prices. US-based low-cost carrier Spirit Airlines ceased all operations on May 2, 2026, while European low-cost carriers Air Baltic and Wizz Air face growing bankruptcy risk and have been forced to restructure their operations to cut costs. A 2026 McKinsey report on aviation found that roughly 70 percent of jet fuel surcharges are passed directly to consumers, and airline margins only recover briefly when fuel prices fall. The report concluded that ongoing economic pressure will force the global industry to retire older, less fuel-efficient aircraft, cut low-demand routes, and further reduce overhead costs to remain solvent.

Not all regional carriers have suffered losses, however. Israel’s flag carrier El Al has reported record annual profits, more than double its previous yearly record. The gain comes as most international airlines have suspended service to Israel, leaving El Al as the near-exclusive option for international travel to and from the country, a position that has allowed the airline to raise fares sharply. Many passengers have publicly criticized the “outrageous” pricing that has come with the near-monopoly.

Industry consultants say the conflict will have long-term impacts on global aviation investment that will outlast the current hostilities. “Airport investment deals, geopolitical risk is increasingly being reflected in downside scenarios, valuation assumptions and risk premiums,” said Harsha Jaison, an aviation consultant at global advisory firm ICF. The changes to how the industry prices geopolitical risk, she added, are likely to become a permanent feature of aviation planning in the Middle East and globally.

South Korea’s tech-heavy Kospi stock index, long known as the world’s most volatile major benchmark, is reeling from one of the sharpest downward corrections in its history, triggered by a sudden pullback in AI-fueled tech stock gains that has left millions of retail investors facing devastating losses on life-changing savings. The rout, which unfolded between June and August, has drawn comparisons to the catastrophic market drops seen during the 1997 Asian financial crisis and the 2020 Covid-19 pandemic, shining a bright spotlight on the risks of overconcentrated bets on high-growth artificial intelligence assets among amateur traders.

The scale of the swing has been staggering: after more than doubling in value in the first half of the year to push past the 9,000-point threshold in mid-June, the index plummeted to 5,500 points in just a matter of weeks. It has since clawed back some losses to stabilize around 6,800 points, but the damage to individual investors’ portfolios has already been done. The root cause of the sell-off, according to Wee Khoon Chong, a strategist at global financial services firm BNY, is growing investor anxiety over the massive amounts of capital being poured into AI development, with many market participants questioning whether the current valuations of leading chipmakers and AI firms are sustainable.

For many ordinary South Korean savers, the downturn has turned anticipated life milestones into financial uncertainty. Take Yongjoon Kim, a bank worker who had earmarked his investment gains for a down payment on a new home ahead of his wedding later this year. Kim lost roughly 20 million Korean won (equivalent to $14,000 USD) after his concentrated tech portfolio dropped by 25% in July alone. “This loss is going to hurt, and I’ll have to put in extra work for years to make up the gap,” Kim said in an interview. “But I’m luckier than many of my friends who went all in with their entire life savings – they’re in desperate situations right now.”

Kim’s experience is far from unique. Woongsa Kim, another retail investor, bought shares of leading memory chipmaker SK Hynix at the start of the year using half of his annual work bonus. The stock surged to four times its original value at the index’s peak, only to wipe out almost all those gains in the subsequent correction, cutting the investment’s value to half its peak high. “Just thinking about what I lost brings me to tears,” he told the BBC.

The crisis has been amplified by the explosive growth of leveraged trading among South Korea’s retail investors, a trend that has also picked up steam in markets including Taiwan and the United States, according to Frank Benzimra, head of Asia equity strategy at Societe Generale. Leverage allows investors to borrow money to control a larger block of shares than their own capital can afford, magnifying gains when prices rise but triggering forced liquidations – called margin calls – when prices fall below a pre-agreed threshold. By the end of July, an estimated 1.2 million South Korean retail investor accounts had received margin calls, a figure equal to roughly one out of every 30 working-age adults in the country.

Many of the traders caught up in the rout were first-time investors lured into the market by the global AI boom and widespread fear of missing out on fast gains. Marketing professional Chanyong Park saw his holdings in US-based AI chip giant Nvidia surge by more than 1,000%, then reinvested almost all of those profits into SK Hynix – only to see the bet go sour, erasing roughly $10,000 in value. The losses have thrown his plans to quit his job in October and launch his own business into doubt. “I’m now seriously questioning whether I’ll have enough capital to move forward with that plan,” Park said. Like many other affected investors, he is holding onto his shares in hopes of a rebound, but recent wild swings have made him hesitant to add more capital to his position. “It often doesn’t feel like price movements are driven by rational fundamentals – it feels a lot like gambling,” he added.

Another investor, Youngji Park, went all in on Samsung shares, which peaked at a total value of 45 million Korean won before suffering what he describes as a gut-wrenching downturn. “I feel like a fool for trusting the Korean market,” he said, adding that he has no choice but to hold his position and wait for a recovery over the long term. Even college students have been caught up in the damage: Soomin Yi pooled her money with a friend to buy SK Hynix shares after feeling FOMO (fear of missing out) on the AI boom, but neither had any formal investing experience or access to experienced guidance. They held onto their shares even after they peaked in June, clinging to speculation that prices would rise even higher to five million won per position, and are now sitting on heavy losses.

The extreme volatility of the Kospi has raised ripple effect concerns for other global markets, with Benzimra noting that other tech-heavy benchmarks like Japan’s Nikkei 225 have moved in lockstep with South Korea’s wild swings. However, he added that most large, diversified global markets are unlikely to see the same level of extreme volatility, as their indexes include a far broader mix of sectors that can cushion against sector-specific sell-offs. “You won’t see this kind of extreme movement in large diversified markets like the Tokyo Stock Price Index or US equity markets,” he explained.

Investors who followed traditional diversification advice have fared far better in the downturn, with diversified portfolios softening the blow of the tech rout. Yongjoon Kim, who also holds positions in overseas markets, says the entire episode is a critical warning for young and new investors, especially in South Korea. “This is a wake-up call not to put all your eggs in one basket and hope for the best,” he said, adding that he regrets not taking a more cautious approach to his tech stock bets. His fiancée, Gaeon Lee, remains optimistic that the market will eventually recover, but she says the constant stress of monitoring plummeting investments has taken a clear toll on her partner. “Seeing our home savings take a hit was definitely a wake-up call for all of us,” she said.

New preliminary data released by Airports Council International has marked a historic milestone for global aviation: South Korea’s Incheon International Airport, the country’s primary international entry point, has overtaken long-standing industry leaders to become the world’s busiest airport for international passenger traffic in the first half of 2025.

According to the recently published figures, Incheon handled 38.4 million international passengers between January and June this year. This puts it just ahead of the United Kingdom’s London Heathrow Airport, which secured second place with 37.79 million passengers. Singapore’s iconic Changi Airport follows closely in third position, recording 38.4 million passengers, recording 34.53 million international travelers over the same period.

The shift in rankings marks a dramatic reversal of position from just a few years ago. Full-year statistics from 2024 and 2025 placed Incheon at 12th and 13th respectively, while London Heathrow sat at fifth in 2024 and seventh in 2025. Most notably, Dubai International Airport — a long-time staple in the top two of this global ranking over the past two years — is now projected to drop out of the top five entirely in this mid-year update.

Officials from Incheon International Airport Corporation have pointed to two key factors driving the unexpected surge in passenger numbers. First, ongoing geopolitical tensions between the United States and Iran have pushed many international travelers to divert transit routes away from major Middle Eastern aviation hubs. “Travelers who previously transited through Dubai en route to European destinations are now choosing to connect through Incheon instead,” the corporation explained. This shift has driven an 18% year-over-year increase in transfer passengers overall, with the number of transfer passengers heading to final destinations in Europe spiking 63.2% to 210,000.

The second core contributor is Incheon’s years-long investment in expanded infrastructure, which has equipped the airport to accommodate the growing passenger volume. Since opening in 2001, the airport has expanded its route network to connect to 158 international destinations, outpacing other major regional hubs: Hong Kong International Airport serves 139 destinations, while Shanghai Pudong International Airport connects to 92 and Tokyo Narita International Airport serves just 86.

Expressing gratitude for the achievement, Incheon International Airport Corporation’s acting president Kim Beom-ho credited the result to government backing, public support, and the relentless work of all on-site airport staff. “We are grateful for the South Korean government’s support, the public’s encouragement, and the hard work of everyone stationed at the airport in making Incheon the world’s No. 1 airport,” Kim said. Looking ahead, the corporation plans to build on this new status by further strengthening its competitiveness through targeted improvements to passenger convenience and experience.

Against a backdrop of deepening labour shortages, rapidly aging demographics, and decades of stagnant productivity, Japan would seem uniquely positioned to embrace artificial intelligence as a transformative solution to its most pressing economic challenges. Yet new data and industry analysis reveal that widespread AI integration across Japanese workplaces has progressed far slower than in major Western and Asian counterparts, leaving the world’s third-largest economy stuck in a holding pattern that mirrors the deliberate, slow pacing of traditional Japanese Noh theater.

Observers note that while Japanese business and political leaders repeatedly voice urgent agreement on the need to adopt AI, tangible action on the ground has barely moved forward – a dynamic that builds dramatic tension but does nothing to address Japan’s immediate economic hurdles. Recent OECD data collected at the end of 2025 underscores this gap: just 8.4% of Japanese workers currently incorporate AI into their daily job responsibilities, a figure that pales in comparison to 50% in the United States and 32% in the United Kingdom. Across Asia, Singapore leads the region in AI uptake, with 56% of workers reporting they use AI multiple times per week, second only to the United Arab Emirates globally.

Industry experts point to deep-rooted cultural and structural factors as the primary drivers of Japan’s slow AI rollout. Austin Xu, co-founder of U.S.-based AI startup Kuse AI, which recently opened a Tokyo office to serve domestic Japanese clients, cites pervasive corporate conservatism and extreme risk aversion as core barriers. “Consensus-driven decision-making and rigid process culture genuinely slow innovation down,” Xu explained. “Tolerance for AI-generated mistakes is almost zero, especially in client-facing roles. Many companies would rather leave a position vacant than turn responsibilities over to a machine.” This approach stands in stark contrast to the U.S., where many businesses grant AI tools far more autonomy to test and improve productivity, adopting a “test and adjust” mindset that allows AI to integrate gradually into core workflows.

Parrisa Haghirian, a professor of international management at Kyoto University of Advanced Science, echoes this analysis, noting that AI adoption faces the same structural headwinds as any organizational change in traditional Japanese firms. “Japanese companies are extremely sensitive to errors, uncertainty, and reputational damage,” she said. Because generative AI still carries inherent reliability risks, it is largely confined to low-stakes internal tasks in Japan: drafting text, summarizing documents, and gathering information. It is rarely deployed to support core business operations, high-stakes decision-making, or end-to-end process improvement.

The slow adoption is particularly acute in Japan’s healthcare sector, where many facilities have not yet completed full digitalization of patient records. An anonymous hospital employee described a system still overwhelmed by mountains of physical paperwork, comparing the current workflow to the Stone Age.

Japan’s national government has acknowledged the systemic challenge of low AI adoption and has taken legislative action to accelerate uptake. Last year, Japan’s parliament passed the AI Promotion Act, which relies on light-touch regulation to incentivize private sector AI investment. The government has publicly committed to turning Japan into “the world’s most AI-friendly country for development and utilization,” arguing that broader AI integration is the only path to reverse Japan’s persistent productivity slump – currently the worst among all G7 advanced economies. Official Ministry of Finance data claims that overall corporate AI use has risen dramatically, from just 11% five years ago to 75% today. But critics push back on this metric, arguing that the vast majority of companies that report having AI access only let a tiny fraction of employees use the technology, and restrict usage to very limited functions.

Additional structural barriers include a widespread shortage of digitally skilled workers and a legacy of outdated, aging corporate IT infrastructure. Yasushi Ogasawara, a professor specializing in Japanese social systems and technology at Meiji University, notes that despite widespread consumer adoption of consumer electronics, general digital literacy across the workforce remains low. Industry projections estimate Japan will face a shortage of nearly 800,000 IT professionals by 2030, and roughly 60% of Japanese companies still rely on core computer systems that are more than 20 years old. Ogasawara also points to a policy priority that conflicts with rapid AI adoption: the Japanese government and corporate sector prioritize maintaining full employment above all else, creating little incentive to roll out AI tools that could displace human workers. “While policymakers talk about AI, reskilling, and digital skills, the top priority remains protecting jobs, so adapting the workforce to new digital technologies moves slowly,” he explained.

There are faint signs of incremental change. A small number of forward-thinking companies have begun prioritizing AI literacy in new graduate hiring, integrating AI into daily work for entry-level employees. Uta Yamaguchi, a new graduate who joined leading general trading firm Kanematsu in April, says she uses AI regularly for routine tasks: drafting emails for executives, summarizing complex documents, and transcribing and summarizing meeting recordings. Even at this progressive firm, however, fully autonomous AI systems that can handle end-to-end multi-step workflows remain almost non-existent, a stark contrast to common deployments in the U.S.

Ogasawara argues that meaningful large-scale change will remain limited for the foreseeable future, noting that Japanese society broadly expects reform to come without disruption. “Drastic change is extremely difficult here,” he said. While disruptive innovation is often viewed as a negative in Japanese culture, analysts warn that without embracing the upheaval that comes with full AI integration, the productivity gains Japan desperately needs to sustain its economy will remain out of reach.