Key facts
- Middle Eastern airlines are unlikely to defer jet orders despite the conflict in Iran and higher fuel prices.
- Long waiting times for new aircraft make deferrals impractical for airlines.
- The conflict has led to damage at Kuwait airport, with repairs estimated to take at least a year.
- Embraer CEO noted some airlines are delaying decisions on exercising purchase options due to uncertainties.
- IATA does not expect the war to significantly impact aircraft orders from Middle Eastern carriers.
Kamil Al-Awadhi, regional vice president for Africa and the Middle East at the International Air Transport Association (IATA), stated that deferring jet orders due to uncertainty and higher jet fuel prices stemming from the conflict in Iran would be an unwise decision for Middle Eastern carriers, potentially leading to significant long-term costs. He indicated that he does not anticipate the ongoing conflict and associated cost increases to impact aircraft orders from the region's airlines, which are major customers for Boeing and Airbus. Al-Awadhi highlighted the lengthy waiting times for new aircraft, particularly Airbus's latest single-aisle planes, as a key factor making deferrals impractical. He described the current situation as a 'hiccup' but affirmed that airlines plan to continue with their existing strategies. Global airlines are reportedly responding to higher costs by reducing flights and increasing fares. Al-Awadhi also expressed concern over a recent Iranian attack in Kuwait that damaged a terminal used by foreign carriers, estimating that repairs could take at least a year and questioning the operational capacity for other airlines flying into Kuwait. He suggested that Kuwait might need to expedite the completion of a new terminal or allow foreign airlines to use facilities currently occupied by domestic carriers like Kuwait Airways. Separately, Embraer CEO Francisco Gomes Neto told Reuters that some airlines are delaying decisions to exercise aircraft purchase options amid uncertainties related to the war in Iran, which has pushed up jet fuel prices significantly. While Embraer has not seen requests to defer deliveries or a slowdown in active sales campaigns, Gomes Neto noted caution emerging around incremental commitments.