Historically, air freight has served as an equalizer during supply chain crises, notably Covid and Red Sea disruption. When ocean freight shipping faltered, air cargo stepped in to fill the gap. This time is different. Unlike previous shocks, the current conflict is hitting airlines and air cargo industry harder than ocean shipping amidst fears the worst may be yet to come.

“Typically, at the start of each month, we report the global air cargo market’s performance for the previous 4-5 weeks – but, right now, whether demand was down -2% or -4% in March does not concern the industry greatly if we are on the verge of a global economic crisis,” says Niall van de Wouw, Xeneta’s Chief Airfreight Officer.

“There is clearly a lot of concern and unanswered questions about the market outlook, but we also see a current transparency and maturity in customer and supplier relationships, and a sense of solidarity that although the impact of the conflict is beyond their control, they will get through it together.”

Van de Wouw added: “Airfreight rates are going up, and we already see evidence of the Middle East conflict reshaping global airfreight pricing, but, for shippers, cost is only one of the variables. Protecting market share and service to customers also plays an important role.

“Will the increase in fuel prices dampen demand for air freight? Not immediately, but if this conflict continues in the longer term, then definitely yes because the world would be facing a much broader economic issue.”

Until then, he expects the air freight industry will continue to find a way to transport goods, ‘but that will come at a cost’. He highlighted how capacity has shifted to safer airport locations such as Muscat and Jeddah to keep air cargo supply chains moving and expects to see more such flexibility

“Right now, we can see a lot of solidarity and trust between shippers, forwarders, and airlines to get goods moved. We see businesses respecting contracts as much as they can and sticking to what they have agreed as they wait to see what unfolds,” he said.

Air cargo stakeholders are pinning their hopes on a fast resolution to the current situation in the Middle East. Cities like Dubai and Doha occupy strategic midpoints between the Americas, Asia, and Europe, and have served as the growth engine behind the rise of super-connectors like Emirates, Etihad, and Qatar Airways. Now, geographic advantage has become a strategic vulnerability as hub airports have become victims of the conflict.

The ripple effects reach even further. An oil shock has nearly doubled jet fuel prices, squeezing carriers that are already rerouting or grounding flights due to financial pressures.

Five weeks into the conflict, air cargo capacity in the region remains roughly -30% below pre-conflict levels – and that squeeze in supply is showing up in rates. Global air cargo spot rates in March surpassed 2025 peak-season levels, reaching USD 2.86 per kilo – their highest point since December 2024.

The conflict escalated in the middle of tender season for annual airfreight contracts, accelerating a shift already underway: in Q1 2026, shippers moved meaningfully towards three-month agreements over annual contracts, compressing rate validity across the market. This is in line with Xeneta’s advice. “We have been recommending postponing tenders during the present uncertainty, because what is the value of making a longer-term commitment now when the whole backdrop can change so quickly?” van de Wouw said.

For airline-forwarder negotiations, Q1 2026 echoes the dynamics that emerged during Covid. In March, the share of global volumes shipped under spot rates rose three percentage points to 52% – just one point below the level recorded at the onset of the pandemic.

The rate impact has been sharpest on outbound corridors from South Asia and Southeast Asia to the Middle East. Spot rates surged +50–100% in the week ending 29 March, compared to just four weeks prior. The spike reflects a convergence of pressures: severe capacity shortages from heavy reliance on Middle Eastern carriers, near-doubled jet fuel costs, and newly added war-risk surcharges.

The disruption is no longer contained to the Middle East. Because the region accounts for roughly half of all capacity on Asia–Europe corridors – and for South Asia onward to the Americas – the squeeze is now reshaping flows across entire lanes.

Spot rates from Southeast Asia and South Asia to Europe have followed similar trajectories, given Middle Eastern carriers’ dominance on those routes. By contrast, Northeast Asia–Europe lanes have held up comparatively better as airlines deployed more direct flights to compensate. Europe–Africa corridors registered +31% rate growth, reflecting the Middle East’s role as the primary transit hub connecting the two regions.