Global aviation faces turbulence as Iran crisis, costs reshape outlook

Prominent Tanzanian aviation executive Mr Gaudence Temu says the industry is entering a period of uncertainty despite the strong demand fundamentals.

He notes that while a temporary ceasefire has been reported between the United States and Iran, uncertainty remains over whether it will hold or escalate again—posing significant risks to global aviation stability.

“Regardless of the positive outlook, the industry will face major challenges from the ongoing conflict. There is still uncertainty on whether the ceasefire will hold or whether the war will continue,” he said.

According to him, the conflict has already affected airspace security, forcing airlines to reroute flights, close certain air corridors and reduce operational efficiency.

“Airspace closures and rerouting have become more frequent, and this has reduced the effectiveness of operations across many international carriers,” he added.

These disruptions, he said, have led airlines to scale down capacity and reduce the number of flights on some international routes.

The operational disruptions have also triggered a sharp increase in ticket prices globally, as airlines attempt to offset higher fuel costs and longer flight paths resulting from rerouting.

“Ticket prices have surged due to higher operating costs and longer routes,” he said.

Africa and Tanzania not insulated

While Africa accounts for only 2.1 percent of global air cargo demand, according to IATA data, industry experts say the continent will still feel the ripple effects of global disruptions. Mr Temu noted that Tanzania, despite being geographically distant from the Middle East conflict zones, is not insulated from the economic consequences.

This week IATA had also confirmed that while crude prices dropped following recent ceasefire announcements, restoring the global supply of jet fuel and other refined products needed more time.

Speaking to The Citizen, senior aviation expert Mr John Njawa said rising costs remain one of the most significant structural challenges facing airlines globally, including Tanzania’s national carrier.

“Cost is still a major challenge for flag carriers. Even when demand is strong, profitability is eroded by rising operational expenses,” he said.

Mr Njawa said airlines must adopt stronger internal strategies, including performance-based incentives and improved organizational efficiency, to remain competitive in a volatile environment.

He also emphasised the need for better coordination of legal and regulatory frameworks to reduce operational friction across the sector.

Mr Njawa further urged governments and industry stakeholders to adopt long-term strategic planning to strengthen aviation resilience, particularly in developing markets.

His remarks come at a time when global aviation is projected to generate $41 billion in profits in 2026, according to IATA, yet profitability remains uneven across regions and individual carriers.

Local market

On March 30, 2026, the Controller and Auditor General (CAG) Mr Charles Kichere presented the 2024/25 report to President Samia Suluhu Hassan.

It showed that Air Tanzania Company Limited (ATCL) had accumulated debt of Sh748 billion by June 2025, with losses rising to Sh191.19 billion in 2024/25 alone, bringing total losses above Sh700 billion. Costs rose faster than revenues, with expenses reaching Sh675 billion. Load factor averaged 55 percent across 87 routes, while inefficiencies in cargo operations and weak controls led to additional losses, including Sh20 billion through agents and Sh3.35 billion in idle aircraft costs.

While global aviation continues to show resilience, the combination of geopolitical uncertainty, rising fuel costs and operational disruptions is reshaping industry expectations.

For Tanzania and other emerging aviation markets, the challenge is not just participating in the global recovery—but surviving its volatility.