Airlines Extend Flight Suspensions Into July, Refund Fares 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 and beyond, as geopolitical disruptions continue to impact global travel.

High-level negotiations between the United States and Iran collapsed on April 12 after more than 21 hours of talks 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 to global shipping. Although Tehran agreed to reopen the waterway under a temporary truce; prompting Washington to stand down planned operations, tensions remain. Israeli military activity in Lebanon continues to be a sticking point, with Iran insisting it be included in any agreement, a position not shared by the U.S. and Israel.

The uncertainty has severely affected 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 cities such as 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 globally, forcing airlines to process large‑scale refunds for bookings well into the summer travel season. Industry estimates suggest the Middle East travel sector is losing nearly $600 million daily.

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 been hit. Data from Goldman Sachs shows transaction volumes in the United Arab Emirates fell by 51 percent in early March compared to February levels, outpacing declines seen 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, erasing gains recorded earlier in the year.

Analysts note that while Gulf economies struggle with the fallout, other regions could potentially benefit from diverted tourism flows. Nigeria, in particular, has been identified as a possible alternative destination for international travellers seeking safer options outside the Middle East. However, security concerns continue to undermine that opportunity.

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. The advisory followed recent attacks by armed groups near the capital that left at least 20 people dead. Persistent threats; including kidnapping, banditry, and terrorism, have heightened safety concerns in public spaces such as markets, hotels, and places of worship.

Nigerian authorities have downplayed the U.S. move, describing it as precautionary and not reflective of nationwide conditions. Nevertheless, the timing has reinforced caution among foreign tourists and investors.

As instability continues to reshape global travel patterns, the contrast is stark: Middle Eastern hubs grapple with grounded flights and falling asset values, while countries like Nigeria face internal challenges that limit their ability to capitalise on shifting demand. The evolving crisis underscores how geopolitical tensions can rapidly disrupt aviation, tourism, and investment flows, leaving both established and emerging markets navigating complex and often overlapping risks.