Middle East conflict unlikely to affect long-term strategic planning and growth

A new report by global law firm DLA Piper (The Future of Global Aviation) finds that despite the impact of the Middle East conflict on routes and operations, major carriers and industry analysts do not currently expect the disruption to derail long-term strategic planning.

Based on a global survey* of 100 senior executives from aviation organisations, the report was prepared by Infralogic in collaboration with DLA Piper’s aviation lawyers and macroeconomists from HSBC Global Investment Research.  The report finds that three-quarters of industry leaders surveyed in the report named Asia their top region for traffic expansion, with the Middle East close behind at 72 percent. The report also identifies the sector's most compelling opportunities: new technologies, sustainable fuels and large-scale infrastructure upgrades.  

Tony Payne, Global Co‑Chair of DLA Piper’s Aviation and Aerospace sector, said: “Despite ongoing and developing geopolitical tensions, this report captures a pivotal moment for global aviation, where unprecedented passenger demand, renewed infrastructure investment, and rapid technological evolution are reshaping the industry’s trajectory. The sector, as it always has done, continues to navigate significant external pressures - from the conflict in the Middle East, the resulting fuel price increases through to supply chain disruption. However, the industry has proven time and again its resilience. What is needed now, for the next phase of its development is not only ambition, but collaboration and sustained government support to ensure that the sector’s momentum can be translated into long‑term progress.”

Marc Nichols, Global Co‑Chair of the firm’s Transport and Logistics sector, added: “Aviation growth is increasingly concentrated in regions where rising incomes, government‑backed infrastructure programs, and connectivity ambitions are reshaping global traffic flows. Emerging markets across Asia, the Middle East, Latin America, and Africa are no longer peripheral – they are central to the industry’s next phase of expansion. These regions are pairing strong demand with decisive public investment, creating powerful tailwinds for airlines, airports, and investors alike. At the same time, established markets face growing constraints from capacity, regulation, and ageing infrastructure. The opportunity ahead is significant, but not automatic. Success will depend on aligning capital, policy, and regulation at pace. Those that mobilise investment and execute at scale will define aviation’s next era of growth.”

Key Findings

Geopolitical risks

More than half of respondents (59 percent) say US tariffs have greatly disrupted global aerospace supply chains. This has led to higher costs to customers, revised contracts to include tariff-related clauses and, in some regions, the pursuance of collective advocacy to mitigate the risks of protectionism

Exacerbated by global sanctions, which are also seen as a major geopolitical risk, almost a third of respondents in both the Americas, Europe, Middle East, and Asia identify this as a significant threat to profit growth. Since 2022, successive waves of sanctions against Russia, Iran, and other jurisdictions have disrupted global aviation supply chains, parts procurement, and aircraft leasing. International Air Transport Association (IATA) highlights that the backlog of aircraft deliveries exceeded 17,000 units in 2025, a record high that sits well above the 2010-2019 backlog of around 13,000 aircraft per year and implying a 14-year wait time at current production rates, which a significant factor to the industry meeting air passenger demand, which is predicted to more than double by 2050.

All respondents agree that government support is essential to maintaining a robust global aviation sector, but there is a geographical split over what action is of the highest priority. Respondents from Europe, Middle East, and Asia highlight green technology incentives are most in need of government support (67 percent), while those in the Americas place greater weight on infrastructure investment and streamlined regulation (56 percent).

Air-traffic increases

When asked which emerging economies will see the greatest traffic increases in the next 24 months, respondents overwhelmingly cited India (83 percent) as having the greatest growth potential. Its domestic market is among the world’s largest, according to the IATA, with departing passenger traffic reaching 174.1 million in 2024 - 10.9 percent above 2019 levels, of which 136.1 million were domestic journeys.

The United Arab Emirates ranked second, cited by 67 percent of respondents, followed by China at 61 percent, reflecting the country’s vast domestic aviation market and its importance to long‑haul international networks. Figures from the Civil Aviation Administration of China (CAAC) put total air passenger trips in China at 730 million in 2024 – a record high – while international flights reached around 6,400 per week. Saudi Arabia (55 percent) and Qatar (44 percent) followed in fourth and fifth. These markets were singled out for their strong passenger growth potential, multibillion‑dollar airport development projects, and supportive aviation policy agendas.

Infrastructure investment

The rebound in passenger demand is reshaping investment priorities across the sector with three‑quarters of respondents expecting global airport infrastructure investment to increase in the next two years. 2025 saw 98 transactions with an aggregate value of USD65.5 billion – the highest annual number of airport infrastructure transactions on record. India is expected to receive the lion's share of new investment, with 88 percent stating that capital will most likely flow into the country as it expands its number of operational airports and regional hubs at an unprecedented pace. India has already embarked on a massive expansion programme, aiming to boost the number of operational airports from just over 150 today to more than 200 by the end of the decade.

The Middle East has also demonstrated strong investment momentum through its sustained growth and development of their own regional hubs, the turmoil of the current dispute notwithstanding. Saudi Arabia’s Vision 2030 programme has earmarked tens of billions of dollars for aviation projects, including the construction of King Salman International Airport in Riyadh and expansions at Jeddah and Dammam.

*Respondent forecasts were collected prior to the Middle East airspace closures in March 2026. While these events are causing disruption, long‑term growth fundamentals currently remain unchanged