RIO DE JANEIRO – Changi Airport is a net beneficiary of the closure of Middle East airspace, given that Singapore Airlines (SIA) responded very quickly to provide additional capacity on Asia-Europe routes.
Commenting on the competitiveness of Singapore’s air hub amid geopolitical tensions in the Middle East, Willie Walsh, director-general of the International Air Transport Association (IATA), said these benefits are temporary and will not make a long-term difference because the Gulf hubs will recover once stability is restored in the region.
He was answering questions at a media roundtable on June 9, the last day of IATA’s annual general meeting, which was held in Rio de Janeiro, Brazil.
To fill the void left by the Middle Eastern carriers’ cancellation of flights between Asia and Europe, airlines launched more than 400 additional flights between Singapore and cities such as Frankfurt, London, Munich, Paris, Perth and Sydney from March to May, according to Changi Airport Group.
SIA announced that it will increase frequencies to Manchester in Britain, Milan in Italy, Munich in Germany, and London Gatwick in the latter half of 2026.
The national carrier has also deployed 471-seater Airbus A380 aircraft on services to and from Frankfurt, complementing the use of smaller 264-seater Boeing 777 aircraft.
Commending SIA’s quick response in adding more capacity on Asia-Europe routes, Walsh said the airline’s actions had temporarily strengthened Singapore’s position as an air hub.
He then gave credit to the Singapore Government for postponing the roll-out of the sustainable aviation fuel levy because of the impact of the Middle East war.
The levy now applies to passengers departing Singapore from Jan 1, 2027, on flight tickets sold from Oct 1, 2026. It was originally meant to apply to passengers leaving Singapore from October 2026, holding tickets sold from April 1, 2026.
From a wider perspective, Walsh noted that Changi Airport will be among the winners during this period of disruption, even if it could be partially exposed to the loss of services from some smaller airlines.
For example, Philippine low-cost carrier Cebu Pacific has reduced the frequency of flights between Cebu and Singapore until the end of October, and Thai Lion Air has similarly cut flights serving the Phuket-Singapore route.
It is a different picture elsewhere in the Asia-Pacific region, he said, where some airlines have yet to fully recover from the effects of the Covid-19 pandemic or are not very profitable amid additional headwinds from jet fuel price increases.
Nevertheless, Walsh believes that the Gulf air hubs will recover fully once there is more stability in the Middle East.
Recalling a conversation he had with Etihad Airways chief executive officer Antonoaldo Neves, Walsh said that the Middle Eastern airline is expecting its capacity in July to be higher than that a year ago.
Walsh noted that IATA forecast passenger demand in the Middle East to dip by 11 per cent in 2026, but qualified this by saying demand had actually fallen by 60 per cent in March and around 40 per cent in April compared with the same months in 2025.
This means that the Middle East is expected to recover over the course of this year, he said.
On concerns about running out of jet fuel, Walsh said refining capacity has increased in Africa, Britain and Europe, while restrictions on imports of jet fuel produced in India using Russian oil have also been eased.
The British government announced penalties on Russian oil imports in October 2025, but these plans to ban diesel and fuel imports made from Russian oil in other countries were later watered down in May 2026.
Walsh believes that concerns over jet fuel supply have diminished significantly, if not completely, so higher oil prices are simply a short-term cost challenge for airlines to adjust to.
Responding to a question at the closing ceremony on whether longer flight times have become the new norm, Walsh said he does not think this will be the case, as they are a reflection of the temporary closure of Middle East airspace.
“And once things stabilise, the airspace will reopen,” he added.
When airlines flying over the war-stricken region take longer routes to avoid the conflict, fuel consumption increases, which results in cost pressures.
Noting that the aviation industry’s profit margins of 2 per cent are slim, Walsh said any disruption to the air traffic system would therefore be passed on to consumers through higher ticket prices, as airlines cannot absorb the additional costs.
IATA director-general Willie Walsh said any disruption to the air traffic system would therefore be passed on to consumers through higher ticket prices, as airlines cannot absorb the additional costs.
PHOTO: EPA
When asked if delays from the original equipment manufacturers are the next biggest problems facing the industry after the war, Walsh acknowledged that they are among the biggest financial impacts on the sector at the moment.
Noting that supply chain disruptions cost the industry US$11 billion (S$14.2 billion) in 2025, he said airlines might suffer greater losses in 2026 due to a combination of higher fuel burn and increased maintenance costs from the deployment of older aircraft.
On whether Brazilian plane-maker Embraer should build other aircraft to address supply chain issues and disrupt the market dominance of Airbus and Boeing, Walsh said the plane manufacturer is right to continue to focus on building narrow-body aircraft.
This is because moving into the production of jets with larger seating capacity would be very challenging for Embraer, especially with how it serves a specific market segment so well now.
