Iran war oil spike tanks US Europe airline stocks 5-9%; Dubai flights double but fuel soars. Repatriation ramps, Asian carriers mixed.
Gulf War Disrupts Global Air Cargo - Cathay Qantas Rise on Middle East Re-Routes While Lufthansa IAG Tumble (Image: X)
Oil prices surged Thursday, battering US and European airline shares after US-Israeli strikes on Iran disrupted global aviation and spiked jet fuel costs. Dubai International Airport saw takeoffs more than double Wednesday per Flightradar24, signaling tentative restarts at the world's busiest hub, though traffic lags far below normal. Asian carriers gained some ground amid re-routings.
US-Israeli strikes on Iran roiled markets, pushing oil higher and jet fuel to Singapore's all-time high, per S&P Global Platts. Southwest (LUV.N), American (AAL.O), Delta (DAL.N), United (UAL.O), and Alaska (ALK.N) dropped 5-9%; NYSE Arca Airline index fell 6%. Europe saw Air France KLM (AIRF.PA), Lufthansa (LHAG.DE), IAG (ICAG.L), Ryanair (RYA.I) decline.
Wizz Air (WIZZ.L) shed 9% after flagging a $58 million FY26 profit hit; CEO Jozsef Varadi noted limited impact, shifting to Europe. US carriers lack hedges, exposing them to spikes—fuel is second to labor costs. Analysts like Morningstar's Nicolas Owens predict March profitability blows.
Most Middle East airspace closed over missile risks, stranding thousands. Azerbaijan shut southern Nakhchivan airspace near Iran after drone strikes. Dubai, near standstill earlier, doubled takeoffs Wednesday but remains subdued. Air cargo suffers too, stranding perishables and parts. Normalization looks distant as conflict persists.
Dubai Airports CEO Paul Griffiths called it "unprecedented" on LinkedIn Thursday—his first comment since airstrikes began.
Governments chartered flights; over 17,500 Americans returned since Feb 28. Emirates and Etihad run limited Dubai/Abu Dhabi services via safe corridors—Emirates eyes 100+ flights Thursday-Friday with passengers/cargo. Qatar Airways starts relief from Muscat to Europe (London, Berlin, Rome) and Riyadh to Frankfurt.
Canada, Europe, and others secured seats. A Kenya flight from UAE carried 13 schoolchildren and teachers; director Olive Tindika described nightly explosion terror: "It was scary... a very traumatizing experience."
IndiGo operates 17 departures to eight Middle East spots March 6, notifying customers. Air India/Air India Express resumed Jeddah/Muscat as Saudi/Oman airspaces cleared. Asian rebounds: Cathay Pacific (0293.HK), Qantas (QAN.AX), Korean Air (003490.KS) rose; Japan Airlines (9201.T) dipped slightly. Chinese carriers Air China (601111.SS), China Eastern (600115.SS), China Southern (600029.SS) fell 1.5-4%.
Fitch notes European/Middle East carriers hedge 50-80% fuel for three months. Natixis' Gary Ng flags Asian sensitivity to Iran routes, revenue, costs.
A: Southwest, Delta, United etc. fell 5-9%; NYSE Arca index down 6% on oil/fuel spikes.
A: Takeoffs doubled Wednesday per Flightradar24, but still way below normal amid conflict.
A: IndiGo 17 departures March 6; Air India to Jeddah/Muscat; Emirates/Etihad limited ops.
A: Leaves them exposed to sudden spikes; must absorb costs short-term, raise fares later if demand holds.
Disclaimer: This information is based on inputs from news agency reports. TSG does not independently confirm the information provided by the relevant sources.
