Airline stocks slide as passengers scramble to leave Middle East

A traveler checks departure times as many flights are cancelled at Beirut Rafik Hariri International Airport in Beirut, Lebanon, Saturday, Feb. 28, 2026, as many airlines canceled flights due to the conflict involving the United States, Israel and Iran. (AP Photo/Hassan Ammar)

Airline stocks in Asia and Europe extended losses on Tuesday as the U.S. and Israeli air war against Iran escalated, with carriers monitoring fuel price spikes and passengers scrambling to find flights or alternative routes out of the Middle East.

Major Gulf hubs including Dubai, the world’s busiest international airport and normally handling more than 1,000 flights a day, remained closed for a fourth day, leaving tens of thousands of passengers stranded in the Middle East and beyond.

“We can’t get home, we can’t go back to work, we can’t get the kids back to school,” said Tatiana Leclerc, a French tourist stuck in Thailand, whose flight had been set to go via the Middle East hubs that are a key link between Asia and Europe.

Across the Gulf itself, stranded travellers rushed to secure seats on the few repatriation flights that began operating as governments and airlines moved to bring passengers home even as explosions tore through Tehran and Beirut on Tuesday.

Ambra Chessa, an Italian passenger who had been in Dubai, said she eventually boarded an unscheduled charter flight home. “As soon as I arrived at the airport, they said to me, ‘Get on board immediately, you’re leaving in an hour’,” she said.

Carolina Raggi, another Italian passenger, said she received a last-minute alert through Italy’s foreign ministry travel portal, leaving little time to pack. Each seat cost 1,500 euros (US$1,739) and the “plane wasn’t full,” she said.

Kirill Lechleide, a German tourist in Dubai, chose to stay. She said the loud bangs of missiles and drones being intercepted overhead were frightening, but ruled out trying to leave overland via neighboring Oman due to safety concerns.

“The safest place to be is the hotel.”

Airlines hedge rising oil price

Oil prices have surged amid the widening conflict, rising roughly 30 per cent so far this year and threatening to lift jet fuel costs and squeeze airline profits.

Ryanair CEO Michael O’Leary told Reuters the airline was hedged for the next 12 months at about $67 a barrel and that the recent fluctuations would not impact the business. Brent crude was last trading above $83 a barrel.

Qantas Airways CEO Vanessa Hudson said the airline had “pretty good” fuel hedging but the spike in oil prices was significant for the industry. The Australian airline’s shares fell for a second day, closing down 1.8 per cent.

Qantas said last week it had 81 per cent of its fuel hedged for the second half of its financial year ending June 30, while Singapore Airlines and Hong Kong’s Cathay Pacific Airways have fuel hedging programs.

Shares of Japan Airlines closed down 6.4 per cent, while Korean Air Lines dropped 10.3 per cent, its biggest drop since March 2020. Cathay Pacific shares closed down about three per cent.

Shares of major Chinese carriers Air China, China Eastern Airlines and China Southern Airlines all closed down between two per cent and four per cent in Hong Kong and Shanghai.

In Europe, shares of Wizz Air, British Airways owner IAG, Lufthansa and Air France KLM were down five per cent to eight per cent. Shares of U.S. carriers United Airlines, Delta Air Lines American Airlines and Southwest Airlines were down around four per cent.

Financial impact varies by airline

Uncertainty over how long the conflict will last is likely to force travelers to cancel or reschedule travel plans.

Aviation data firm Cirium said over 19,000 flights to the Middle East have been canceled since Saturday, while Tourism Economics said the conflict could lead to a $34 billion to $56 billion drop in visitor spending in the region this year.

“It’s pretty well the biggest shutdown we’ve seen certainly since the COVID pandemic,” said Paul Charles, CEO of luxury travel consultancy PC Agency, adding that beyond passenger disruption the cargo impact would run to “billions of dollars.”

With Russian skies largely closed to Western airlines since the Ukraine war started in 2022, carriers are now squeezed into narrowing flight corridors over the Middle East, forcing many to add more flying time and fuel to circumvent war zones.

Demand for alternatives to Gulf airlines has surged, with bookings and ticket prices jumping on routes like Hong Kong-London, Reuters checks showed on Tuesday. Ryanair also said it had seen a surge for flights within in Europe over Easter.

“Flight plans have to normalize to get the backlog of stranded guests unstuck,” Benjamin Jacobi, Germany head for travel giant TUI, said at a travel show in Berlin.

The operational and financial impact varies significantly among airlines, said Karen Li, J.P. Morgan’s head of Asia infrastructure, industrials and transport research.

“There are important differences across carriers in terms of hedging strategy, air cargo exposure, and network rerouting capabilities that will shape the actual impact from the Middle East situation,” Li said.

Li expects “investors will increasingly differentiate between airlines based on these factors as the situation evolves, rather than treating the sector as a monolith.”

(Reporting by Byron Kaye in Sydney, Hina Suzuki in Tokyo, Julie Zhu in Hong Kong, Sophie Yu in Beijing, Samuel Shen and Winnie Zhou in Shanghai, Ben Blanchard in Taipei, Roushni Nair in Bangalore and Joanna Plucinska in London, Ilona Wissenbach in Berlin, Anna Wlodarczak-Semczuk and Alan Charlish in Warsaw, Shivansh Tiwary and Reuters TV; Writing by Anne Marie Roantree and Adam Jourdan; Editing by Jamie Freed and Mark Potter)