Middle East ticket prices may ease if geopolitical stability improves, as airlines will face fewer disruptions, can reopen direct routes and will be able to offer more attractive fares as competition increases.
Air fares in the Middle East rose by 15 per cent in the first half of this year, compared to the pre-Covid six-month period in 2019. Rising inflation and reduced airline competition on domestic and short-haul routes contributed to the fare increase, the Airports Council International, a global airports trade association, said in its latest report.
This surge contrasts to an average of 9 per cent decrease in fares recorded in the region during the first halves of 2014 and 2019, underscoring the rising cost of air travel.
Airport charges have had “minimal impact” in driving the air fares higher. Airport charges and turnaround costs, including government taxes, have generally increased below inflation levels and, in markets where these charges have moderately decreased, air fares have continued upwards, it said.
Among the Gulf countries, the UAE recorded the highest increase in air fares – 23 per cent – in the first half of 2025, compared to the first six months of 2019, ACI said.
This was followed by a 13 per cent rise in Bahrain, 9 per cent in Saudi Arabia, 7 per cent in Oman and 3 per cent in Jordan during the same period.
However, pressure on air fares may ease when the geopolitical situation in the Middle East improves.
Airlines are likely to benefit from fewer operational disruptions, fewer diversions and the ability to resume more direct flight paths, Stefano Baronci, director general of ACI for Asia-Pacific and the Middle East, told The National.
This will mean lower operating costs and improved efficiency, he said. “With fewer constraints on airspace and flight planning, more carriers may find it commercially viable to enter or re-enter certain routes that were previously avoided,” Mr Baronci said.
“The resulting increase in route options and carrier presence will strengthen competition, which historically tends to exert downwards pressure on fares.”
The end of conflict in the Middle East, combined with the continuing economic expansion in Saudi Arabia and the UAE, is a positive development for airlines and passengers. It will provide “strong momentum for sustained growth in air connectivity across the region”, Mr Baronci added.
Peace deal
A ceasefire between Israel and Hamas has entered its sixth day under a peace plan put forward by US President Donald Trump. As part of Mr Trump's plan to end the Gaza war, Israel has agreed to halt its military advance, while Hamas has freed the last 20 surviving hostages it held. In return, Israel released almost 2,000 Palestinian detainees from the country's jails.
The Gaza ceasefire deal has ended two years of war in which more than 67,900 Palestinians have been killed by Israeli fire.
Israel's war on Gaza, which also involved attacks on Lebanon, Iran and Qatar, escalated geopolitical instability in the region during which airlines faced operational disruptions, flight diversions, route suspensions and higher operating costs.
Many Middle East economies rely on the travel and tourism sector for hard currency, job creation and business. According to an ACI forecast, passenger volumes in the region are set to rise.
Total passenger traffic in the Middle East is forecast to grow to 473 million in 2025, up from 440 million the previous year, underscoring the region’s “dynamism as both a destination and a global connecting hub”, it said.
Travel growth
In August, Middle Eastern airlines recorded an 8.2 per cent year-on-year increase in passenger demand, capacity rose by 6.9 per cent annually while the load factor reached 83.9 per cent, global aviation trade body International Air Transport Association (Iata), said in its latest report.
Global passenger demand was up 4.6 per cent compared to August 2024, it said. Numbers reached a new high during the peak northern summer travel season.
“Planes were operating with more seats filled than ever, with a record load factor of 86 per cent,” said Willie Walsh, Iata director general.
“Despite economic uncertainties and geopolitical tensions, the global growth trend shows no signs of abating, as October schedules are showing airlines planning 3.4 per cent more capacity.”
Despite economic uncertainties and geopolitical tensions, the global growth trend shows no signs of abating
Willie Walsh,
director general of Iata
However, he criticised the continuing supply chain disruption as well as aircraft manufacturers for delayed plane deliveries.
“Airlines are doing their best to meet travel demand by maximising efficiency, making it even more critical for the aerospace manufacturing sector to sort out its supply chain challenges,” Mr Walsh said.
Supply chain costs
Global airlines now face more than $11 billion from supply chain disruptions in 2025, a report by Iata and consultancy Oliver Wyman said.
The study found that airlines are paying excess fuel costs of $4.2 billion as they are forced to run older, less fuel-efficient planes because of delays to new aircraft deliveries, leading to higher fuel costs.
They are also paying additional maintenance costs of $3.1 billion because the global fleet is ageing, and older planes require more frequent and expensive maintenance.
Airlines are also facing increasing engine leasing costs of $2.6 billion for engines to replace those stuck in longer queues on the ground during maintenance. Aircraft lease rates have also risen by 20 per cent to 30 per cent since 2019, the report said.
Holding surplus inventory is costing airlines $1.4 billion as they must stock more spare parts to mitigate unpredictable supply chain disruption, it added.
The specs
Price, base / as tested Dh1,470,000 (est)
Engine 6.9-litre twin-turbo W12
Gearbox eight-speed automatic
Power 626bhp @ 6,000rpm
Torque: 900Nm @ 1,350rpm
Fuel economy, combined 14.0L / 100km
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
Closing the loophole on sugary drinks
As The National reported last year, non-fizzy sugared drinks were not covered when the original tax was introduced in 2017. Sports drinks sold in supermarkets were found to contain, on average, 20 grams of sugar per 500ml bottle.
The non-fizzy drink AriZona Iced Tea contains 65 grams of sugar – about 16 teaspoons – per 680ml can. The average can costs about Dh6, which would rise to Dh9.
Drinks such as Starbucks Bottled Mocha Frappuccino contain 31g of sugar in 270ml, while Nescafe Mocha in a can contains 15.6g of sugar in a 240ml can.
Flavoured water, long-life fruit juice concentrates, pre-packaged sweetened coffee drinks fall under the ‘sweetened drink’ category
Not taxed:
Freshly squeezed fruit juices, ground coffee beans, tea leaves and pre-prepared flavoured milkshakes do not come under the ‘sweetened drink’ band.
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Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Director: Laxman Utekar
Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna
Rating: 1/5
Profile
Company name: Marefa Digital
Based: Dubai Multi Commodities Centre
Number of employees: seven
Sector: e-learning
Funding stage: Pre-seed funding of Dh1.5m in 2017 and an initial seed round of Dh2m in 2019
Investors: Friends and family
Company Profile
Company name: Yeepeey
Started: Soft launch in November, 2020
Founders: Sagar Chandiramani, Jatin Sharma and Monish Chandiramani
Based: Dubai
Industry: E-grocery
Initial investment: $150,000
Future plan: Raise $1.5m and enter Saudi Arabia next year
Specs%20
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%E2%80%98FSO%20Safer%E2%80%99%20-%20a%20ticking%20bomb
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UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
How does ToTok work?
The calling app is available to download on Google Play and Apple App Store
To successfully install ToTok, users are asked to enter their phone number and then create a nickname.
The app then gives users the option add their existing phone contacts, allowing them to immediately contact people also using the application by video or voice call or via message.
Users can also invite other contacts to download ToTok to allow them to make contact through the app.
Sreesanth's India bowling career
Tests 27, Wickets 87, Average 37.59, Best 5-40
ODIs 53, Wickets 75, Average 33.44, Best 6-55
T20Is 10, Wickets 7, Average 41.14, Best 2-12
