Major aviation stocks across Europe and Asia plummeted on Monday, as strikes by the US and Israel on Iran caused travel chaos across the Middle East.
In European trade on Monday, shares in the continent’s biggest airline groups — IAG, Air France-KLM, and Lufthansa — all plunged as investors digested the potential for long-term disruption to the airline industry due to the conflict.
At around 12:45 p.m. local time (7:45 a.m. ET), shares in the London-listed IAG, the parent group of British Airways, Iberia, and Aer Lingus, were down more than 5%. At the same time, Paris-listed Air France-KLM shares had dropped nearly 9%, and Frankfurt-listed Lufthansa shares were 6% lower.
Earlier on Monday, shares of airlines based in the Asia-Pacific regions had also fallen sharply to start the week. Qantas, the Australian flag carrier, Hong Kong’s Cathay Pacific, Singapore Airlines, and Japan Airlines, all saw drops in the region of 5% on Monday.
US airlines, despite having less exposure to the Middle East than many European and Asian airlines, were also set to start the week sharply lower. In premarket trading, the three biggest US carriers — American, Delta, and United — were down more than 5%.
The three largest Middle East-based airlines — Emirates, Etihad, and Qatar Airways — are owned by their respective governments and are not publicly listed.
Global travel chaos
Tumbling airline stocks reflect the huge disruption to airline operations triggered by military actions across the Middle East over the weekend.
Initial US and Israeli attacks on Iran, and subsequent Iranian retaliation, led to the closure of virtually all airspace across the region.
Iran, Iraq, Kuwait, Bahrain, Qatar, Israel, and the United Arab Emirates all closed their airspace.
Tens of thousands of flights were delayed or canceled over the weekend, with scores of passengers stranded around the globe, largely due to the closure of major hub airports in the region.
The three major Middle Eastern airlines — Qatar Airways, Etihad Airways, and Emirates — operate hubs that connect passengers to destinations around the world, meaning that when their operations are disrupted, it creates a huge ripple effect.
While a handful of flights have restarted on Monday, disruption to international air travel is likely to continue for many days, if not longer.
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