Airline stocks took a hammering on Monday after President Donald Trump announced plans to blockade the Strait of Hormuz.
While British, German, and pan-European indexes were down about 1% as markets opened, the travel industry was hit harder.
Wizz Air, the Hungarian budget airline, sank almost 8% on Monday. It’s down some 30% since the start of the year.
Last month, Wizz said it expects to lose 50 million euros due to the war, rising energy costs, and travel disruption. Wizz has canceled its routes to Dubai, Abu Dhabi, Amman, and Jeddah until September.
Since the Strait of Hormuz is a key choke point for the oil trade, fears have been raised that European airports could face jet fuel shortages in the coming weeks. It was reported last week that the European arm of industry body the Airports Council International had warned of shortages within three weeks.
EasyJet, the British budget airline, was down more than 4% as of 11 a.m. local time. And TUI, the travel and tourism firm which also operates its own airline, was down about 3.5%.
Legacy carriers also struggled to reassure investors following Trump’s announcement. Germany’s Lufthansa fell 4.5% and IAG — the conglomerate that includes British Airways and Iberia — was down about 3%.
And in the US, United Airlines, Delta Air Lines, and American Airlines were down between 2% and 3% in premarket trading.
Since the outbreak of the Iran war, airlines have canceled hundreds of flights, bumped ticket prices, and increased surcharges for baggage as they look to offset the surging price of jet fuel.
Oil continues to rise
Meanwhile, it was the opposite story for oil futures, as Brent crude rose more than 7.5%.
That means a barrel of oil costs over $100 again, having fallen below the benchmark when a fragile ceasefire began last week.
But after Iranian and US leaders met in Pakistan over the weekend for peace talks, negotiations fell apart.
Trump then posted on Truth Social on Sunday, “Effective immediately, the United States Navy, the Finest in the World, will begin the process of BLOCKADING any and all Ships trying to enter, or leave, the Strait of Hormuz.”
Early Monday, he added that the US would blockade ships trying to enter or exit Iranian ports starting 10 a.m. ET.
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