Countries rush to cancel Iran flights after US threatens to shut down airlines

The US government told the world: do business with Iranian airlines, or do business with the US dollar system. Countries are choosing the dollar.

Treasury Secretary Scott Bessent announced on September 21 that secondary sanctions would effectively ground Iranian airlines globally starting September 23, giving foreign airports, fuel providers, and ticket sellers roughly 48 hours to cut ties with every Iranian carrier or risk losing access to the US financial system.

A cascade of cancellations

The response was swift and, for Tehran, deeply isolating. Georgia imposed a full ban on Iranian flights. Azerbaijan announced restrictions starting September 22, one day before the deadline. Iraq suspended flights between Baghdad and Iran. Oman cut the Tehran-Muscat route. Turkey banned Mahan Air from its airspace.

The affected carriers, including Mahan Air, Iran Air, and Qeshm Air, were already operating under severe constraints. Years of prior US sanctions had restricted their access to aircraft parts, maintenance services, and modern planes. What’s new is the scope. This isn’t a targeted strike against one airline with alleged Revolutionary Guard ties. This is a blanket action covering every Iranian carrier that still had wheels up.

Operation Economic Outcast

The airline crackdown is part of a broader campaign the Trump administration has branded “Operation Economic Outcast,” an escalation of economic warfare against Tehran that has intensified alongside the ongoing military conflict involving the US and Israel against Iran.

On September 8, the Treasury Department sanctioned all 27 remaining Iranian airlines along with foreign companies that facilitate their operations. That initial action set the stage. Bessent’s September 21 announcement was the enforcement hammer, making clear that the US intended to actually pursue companies and countries that didn’t comply.

Secondary sanctions work differently from primary sanctions. Primary sanctions prohibit US entities from doing business with a target. Secondary sanctions go further: they threaten to cut off any foreign entity that continues doing business with the target from the US financial system. For a country like Georgia or Oman, whose banking systems depend on dollar-denominated transactions, that threat is existential.

The conflict between the US-Israel coalition and Iran has been escalating for roughly seven months, and the economic front has moved in lockstep with the military one.

Regional fallout

For Iraq in particular, the suspension of Baghdad-Iran flights disrupts a relationship that extends well beyond aviation. Millions of Iranians travel to Iraq annually for religious pilgrimages, and Iraqi businesses depend on Iranian goods.

Turkey’s decision to ban Mahan Air is notable because Ankara has historically tried to maintain a balancing act between Washington and Tehran. Mahan Air had already been sanctioned by the US since 2011 for alleged support of Iran’s Islamic Revolutionary Guard Corps, but Turkish authorities had allowed it to continue operating.

Oman, which has long positioned itself as a neutral mediator in the Gulf, also moved to cut the Tehran-Muscat route. Muscat’s role as a diplomatic back channel between Washington and Tehran has been a fixture of Middle Eastern geopolitics for decades.

For regional economies, the disruption extends beyond airlines themselves. Fuel providers, ground handling companies, catering services, and travel agencies that serviced Iranian carriers all face potential exposure to US sanctions.