Dubai jet billionaire says oil spikes risk bankrupting airlines

For Dubai-based billionaire Gediminas Ziemelis the aviation industry is experiencing a sense of deja-vu amid the Middle East conflict: grounded planes, plummeting demand and no clear sense of when it might all be over. During the Covid pandemic six years ago, when a global shutdown hit demand for planes on short-term lease from his Avia Solutions Group, he shifted to air cargo to keep afloat. Now, he plans to move a significant part of Avia’s 145 jets from Europe to Asia and Brazil as the Iran war interrupts flight schedules across the region and curbs demand in Europe. [caption id="attachment_57296144" align="aligncenter" width="2560"] Avia Solutions Group Chairman Gediminas Ziemelis. (Courtesy/Chris Ratcliffe/Bloomberg)[/caption] Major European airlines typically turn to the billionaire’s firm in early spring to lease planes for summer peaks, but this year bookings are significantly lower compared with previous seasons. And, clients in Turkey aren’t rushing to sign new contracts, the tycoon said in an interview. Still, he’s prepared for the moment, spreading out the fleet across multiple hubs and signaling that his Dubai expansion plans remain in place. “We need to be ready for any area, district, jurisdiction and geopolitical risk,” said Ziemelis, who left his home several days before the war started and plans to return to the United Arab Emirates within weeks. “If it lasts more than one month, we may see potential first bankruptcies,” of airlines across the globe he said. That’s largely because of the soaring cost of fuel, which represents about 25% of the total cost of running an airline, he said. Since the start of the conflict oil prices have spiked almost 50% to about $100 a barrel. Some airlines will have to implement additional surcharges, while others may abandon some flights, he said. Questions are also surfacing about the potential availability of jet fuel. Still, US President Donald Trump has signaled the war with Iran could end soon, even as attacks have continued across the region. Ziemelis, 48, has made a business of so-called wet leasing, a risky aviation trade that involves hiring out planes for a short period to airlines complete with pilots, cabin crew and maintenance support. He’s worth $1.7 billion, according to the Bloomberg Billionaires Index. Middle East slowdown As the Iran war entered its fifth week, airlines globally are having to grapple with soaring jet fuel costs and additional flight times on paths that skirt large swathes of the Middle East. Several carriers in Europe and Asia have had to hike ticket prices and cut destinations from their schedules. The crisis is one that Ziemelis is seeking to take in his stride. He says he’ll continue construction of Avia’s 9,000 square-meter regional headquarters in Dubai and doesn’t plan to scale back his operations in the region. Airlines in the Middle East, the most impacted by Iran’s missile and drone attacks, have had to cancel thousands of flights, evacuate passengers, crews and aircraft and some are still largely grounded. Qatar Airways, Bahrain’s Gulf Air and the United Arab Emirates’ flydubai and Air Arabia are running internal checks to see where they can cut costs and reserve cash as the carriers lose out on millions of dollars of revenue each day, Bloomberg reported last month. Still, after the pandemic-induced crisis, airlines rebounded strongly. “After Covid all companies which survived made extraordinary record profits. So sometimes crisis is opportunity,” he said. The upheaval is, though, also affecting Avia’s business in the region. Only one of the 6 aircrafts the company has leased to customers in the Middle East is operational and the rest have to be stationed outside of the region to avoid paying war premiums on insurance. Each flight can be charged up to $50,000 in insurance, according to Ziemelis. “Flights are partially connected to the insurance prices and the market is crazy,” he said. Last month Fitch Ratings revised Avia Solutions’ outlook to negative from stable. In its report it said that while the overall impact of the Middle East conflict on group’s business remains uncertain, it “could weigh on profitability and liquidity in 2026.” The inaugural Cargo Facts Routes and Airport Conference will take place April 27-28 in Brussels at the Marriott Hotel Grand Place, along with Cargo Facts EMEA 2026, taking place April 28-30. To see the agendas and register for the events, visit CargoFactsEvents.com .

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