War against Iran pushes weaker European airlines to brink of bankruptcy

Pars Today – Rising fuel prices caused by escalating tensions in West Asia and attacks on Iran have increased financial pressure on some smaller European airlines, pushing them toward potential collapse and bankruptcy.

According to Pars Today, citing IRNA, as the U.S. war against Iran has driven oil prices higher once again, investors and aviation industry executives are seeing growing signs of financial distress among Europe’s weaker airlines.

The British airline easyJet is reportedly on the verge of being acquired by a U.S. company, while Latvia-based airBalticis seeking short-term financing to meet its debt obligations. Norway’s Norse Atlantic Airways is also undergoing a strategic review.

Reuters reported that rising fuel costs have exposed the fragile financial positions of airlines, which are now considering administrative restructuring, asset sales, or measures to protect themselves against bankruptcy.

Barma Bocom, head of Europe at financial advisory firm Interpath, said:

“We are currently presenting financial proposals to four or five very large airlines across Europe for restructuring.”

The global aviation industry last month nearly halved its profit forecast for 2026 due to conflicts in West Asia and rising fuel prices. Bankers and analysts said that the U.S. war against Iran, which caused a major surge in fuel costs, has intensified the financial pressures already created by the COVID-19 pandemic.

Airbus has also reduced its 20-year forecast for passenger aircraft demand due to the impact of war and trade tensions.

Willie Walsh, Director General of the International Air Transport Association (IATA), warned that if fuel prices remain elevated, some airlines could go bankrupt or be acquired by larger companies.