Travel Stocks Fall as US-Iran War Causes Worst Disruption Since Pandemic

LONDON/SYDNEY/HONG KONG, March 2 (Reuters) – Travel actions The price of oil plunged on Monday as the escalating conflict between the United States, Israel and Iran disrupted flights around the world, closed key hubs in the Middle East and sent oil prices soaring, with analysts warning of weeks of disruptions ahead.

Data showed that at least 4,000 flights had been canceled worldwide in the past three days.

Dubai, the world’s busiest international hub, and Doha remained closed for a third day, leaving tens of thousands of passengers stranded as aviation faced its biggest test since the COVID pandemic. Jordan on Monday became the latest country in the region to partially close its airspace.

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Oil prices rose as much as 13% to their highest level since January 2025 as Iran and Israel stepped up attacks, raising the prospect of higher fuel costs for airlines.

American airline actions fell when markets opened on Monday, with American Airlines AAL.O and United Airlines UAL.O falling more than 6%.

The STOXX Asia/Pacific 600 Travel & Leisure .SXP1CGS and STOXX Europe Travel & Leisure .SXTP, which includes major airlines, lost a combined market value of $11.9 billion, according to Reuters calculations.

Aviation analytics firm Cirium said at least 1,560 flights were canceled on Monday, meaning more than 4,000 flights have been canceled since Saturday. That figure is likely higher given incomplete data collection, Cirium added.

Actions at TUI TUI1n.DE, the largest in Europe travel company, were down 9.6% at 1302 GMT, while Lufthansa LHAG.DE was down 5.7% and British Airways owner IAG ICAG.L was down 5.4%. Hotelier Accor ACCP.PA and cruise company Carnival also fell sharply.

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“All the airlines are full and all the flights are full because people just have to take what they can,” said Paul Charles, director of travel PC Agency, which was also stranded abroad. Charles said the planes and crew were scattered around the world in the wrong places in a “nightmare scenario.”

Analysts highlighted rising fuel costs, cancellations and diversion costs as the main pressure points for airlines, despite the hedges. JPMorgan, Goodbody and Citi pointed to Wizz Air WIZZ.L as the most exposed European airline due to its large presence in Israel. Is actions They were down 7% on Monday.

Even before the conflict, the industry was under pressure due to cost concerns. travelTravelers avoided expensive vacations. Norwegian Cruise Line Holdings NCLH. On Monday it forecast weaker-than-expected 2026 earnings.

Many Middle Eastern airlines continued to cancel flights. Flydubai suspended all flights to and from Dubai until 3:00 p.m. (11:00 GMT) on Tuesday.

Asian airline stocks were also hit, including Japan’s ANA Holdings 9202.T, Air China 0753.HK601111.SS, China Eastern Airlines 600115.SS and Malaysia’s AirAsia X AIRX.KL, which fell at least 4%. Cathay Pacific 0293.HK has canceled all flights to the Middle East, including Dubai and Riyadh, and waived rebooking fees.

Singapore Airlines canceled flights to and from Dubai until March 7, while Japan Airlines suspended Tokyo-Doha services.

Brendan Sobie, an independent aviation analyst based in Singapore, said Indian airlines were particularly exposed due to the heavy duty schedules of migrant workers in the Middle East and a ban on using Pakistani airspace on flights to and from Europe.

Air India canceled flights between India and Zurich, Copenhagen, Birmingham, the United Arab Emirates, Saudi Arabia, Israel and Qatar and said services to New York and Newark would refuel in Rome.

Data provider VariFlight said mainland Chinese airlines had canceled 26.5% of flights to and from the Middle East from March 2 to 8, pointing to “major short-term disruption” but a wait-and-see stance on potential longer-term schedule changes.

Passengers struggle to change flights

The domino effects have affected travelers all over the world. Dubai was the world’s busiest international airport in 2024 with 92 million passengers, according to the Airports Council International, ahead of London Heathrow by 13 million. Doha ranked tenth.

Lufthansa canceled passenger flights in and out of the United Arab Emirates, but attempted to fly an Airbus plane from Dubai to Munich without passengers.

James Halstead, managing partner at Aviation Strategy, said he was optimistic the impact on the sector would not be long-term and that travel volumes were unlikely to decline substantially worldwide.

Qatar Airways passengers in Sydney told Reuters they rushed to reorganize travel with little information. Ascanio Giorgetti, 16, and his mother, Alessandra Giorgetti, from Italy, had their flight to Milan via Doha cancelled. They arranged an alternate route home via Los Angeles on another airline.

“We don’t have any information, there is no answer to the phone from Qatar (Airways),” he said, adding that the tickets had cost 4,000 euros ($4,708).

Jenni and Doug Stewart, both 78, were flying from Sydney to Scotland via Doha when their flight returned to Melbourne, before flying to Sydney. “They told us the airspace had been closed,” Jenni said. “It was chaos in Melbourne, hundreds of people searching for even the vaguest information,” Doug said.

(1 dollar = 0.8495 euros)

(Reporting by Byron Kaye and Hollie Adams in Sydney, Shivangi Lahiri and Yadarisa Shabong in Bengaluru, Joanna Plucinska and Samuel Indyk in London, Tim Hepher in Paris, Federico Maccioni in Dubai, Alessandro Parodi in Gdansk, Danilo Masoni in Milan, Ben Blanchard in Taipei, Julie Zhu in Hong Kong, Samuel Shen in Shanghai, David Dolan and Maki Shiraki in Tokyo, Jun Yuan Yong in Singapore and Juarawee Kittsilpa in Malaysia; written by Anne Marie Roantree and Joanna Plucinska; edited by Jamie Freed, Mark Potter and Susan Fenton)