Major Asian airlines have reported a sharp rise in demand on Europe-bound routes as travellers increasingly avoid disrupted Middle Eastern transit hubs, a shift analysts say could persist for months even after the Iran conflict ends.


Airlines including Cathay Pacific Airways, Singapore Airlines, Korean Air, and Qantas Airways last week reported strong performance on European routes in March, despite facing sharply higher operating costs, including a doubling in jet fuel prices, Reuters reports.


“We have ... mounted additional flights and capacity to Europe in March and April to cater for an upsurge in market demand as passengers prioritised alternative routings,” said Cathay Pacific Chief Customer and Commercial Officer Lavinia Lau.


She added that demand was expected to remain strong through April, supported by Easter travel and increased long-haul bookings transiting through Hong Kong.


Singapore Airlines said seat occupancy on its European services rose to 93.5% in March, up from 79.7% a year earlier, driven in part by spillover demand as capacity through Middle Eastern hubs declined. The airline said Europe recorded the strongest growth among all regions.


Before the conflict, Gulf carriers Emirates, Qatar Airways, and Etihad Airways together accounted for around one-third of passenger traffic between Europe and Asia, and more than half of passengers flying from Europe to Australia, New Zealand, and the Pacific Islands, according to aviation data firm Cirium.


The three carriers have been gradually restoring capacity, with all returning to at least 60% of pre-conflict flight levels, according to Flightradar24 data.


However, they continue to face headwinds, including travel advisories from Australia warning citizens against travelling to or transiting through Gulf hubs, which can affect travel insurance coverage.


As a result, passengers are paying a premium for itineraries that avoid the Middle East, according to Google Travel data.


For economy-class return flights between Sydney and London departing next Saturday, an Etihad itinerary via Abu Dhabi is the cheapest at A$1,861 ($1,333.59). By contrast, Gulf-free alternatives are significantly more expensive, with United Airlines at A$3,144 via San Francisco and Thai Airways at A$3,901 via Bangkok.


Analysts at Bank of America said in a recent note that “tight pricing and share gains on Asia-Europe routes could persist for 6-12 months even after the end of the war given forward booking lags and traveler risk aversion.”


By Vafa Guliyeva