- Global travel shares plunge
- Passengers worldwide stranded as conflict hits airlines
- Oil prices surge to highest in months
LONDON/SYDNEY/HONG KONG, March 2 (Reuters) - Travel shares tumbled on Monday as escalating conflict between the U.S., Israel and Iran disrupted flights worldwide, closed key Middle Eastern hubs and sent oil prices surging, with analysts warning of weeks of disruption ahead.
Data showed at least 4,000 flights had been cancelled around the world in the last three days.
Dubai, the world's busiest international hub, and Doha remained shut 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.
Oil prices jumped as much as 13% to their highest since January 2025 as Iran and Israel stepped up attacks, raising the prospect of higher fuel costs for airlines.
U.S. airline shares dropped when markets opened on Monday, with American Airlines and United Airlines down more than 6%.
The STOXX Asia/Pacific 600 Travel & Leisure and the STOXX Europe Travel & Leisure indexes, which include major airlines, shed a combined $11.9 billion in market value, according to Reuters' calculations.
Aviation analytics firm Cirium said at least 1,560 flights were cancelled on Monday, meaning more than 4,000 flights have been cancelled since Saturday. That figure is likely higher given incomplete data collection, Cirium added.
Shares in TUI, Europe's largest travel company, were down 9.6% at 1302 GMT, while Lufthansa was down 5.7% and British Airways-owner IAG slid 5.4%. Hotelier Accor and cruise company Carnival also fell sharply.
"Every airline is full and every flight is full because people are just having to take what they can," said Paul Charles, head of travel consultancy PC Agency, who was himself stranded abroad. Charles said aircraft and crew were scattered around the world in the wrong places in a "nightmare scenario."
Analysts highlighted rising fuel costs, cancellations and rerouting expenses as the main pressure points for airlines, despite hedging. JPMorgan, Goodbody and Citi pointed to Wizz Air as the most exposed European carrier because of its large presence in Israel. Its shares were down 7% on Monday.
Abu Dhabi's Etihad on Monday resumed some flights, while Israel's Ben Gurion Airport said it would reopen to a limited extent.
Even before the conflict, the industry was under strain as cost-conscious travellers avoided pricey holidays. Norwegian Cruise Line Holdings on Monday forecast weaker-than-expected 2026 profits.
Many Middle Eastern carriers continued to cancel flights. Flydubai suspended all flights to and from Dubai until 3 p.m. (1100 GMT) on Tuesday.
Asian airline stocks were also hit, including Japan's ANA Holdings, Air China, China Eastern Airlines and Malaysia's AirAsia X, which all fell at least 4%. Cathay Pacific cancelled all flights to the Middle East, including to Dubai and Riyadh, and waived rebooking fees.
Singapore Airlines cancelled flights to and from Dubai through March 7, while Japan Airlines suspended Tokyo-Doha services.
Singapore-based independent aviation analyst Brendan Sobie said Indian carriers were particularly exposed due to heavy Middle Eastern schedules serving migrant workers and a ban on using Pakistan's airspace on flights to and from Europe.
Air India cancelled flights between India and Zurich, Copenhagen, Birmingham, the UAE, 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 cancelled 26.5% of flights to and from the Middle East from March 2 to March 8, pointing to "sharp near-term disruption" but a wait-and-see stance on potential longer-term schedule changes.
PASSENGERS SCRAMBLE TO CHANGE FLIGHTS
The ripple effects have hit travellers worldwide. Dubai was the world's busiest international airport in 2024 with 92 million passengers, according to Airports Council International, ahead of London's Heathrow by 13 million. Doha ranked 10th.
Lufthansa cancelled passenger flights in and out of the UAE, but sought to fly an Airbus jet out of Dubai to Munich without passengers.
James Halstead, managing partner at Aviation Strategy, said he was optimistic the impact on the sector wouldn't be long-term and that travel volumes were unlikely to decrease substantially around the world.
Qatar Airways passengers in Sydney told Reuters they scrambled to rearrange travel with little information. Ascanio Giorgetti, 16, and his mother Alessandra Giorgetti from Italy found their flight to Milan via Doha cancelled. They secured an alternative route home via Los Angeles on another airline.
"We have no information at all, no answer on the phone from Qatar (Airways)," she said, adding 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 turned back to Melbourne, before they then flew to Sydney. "We were told the airspace had closed," Jenni said. "It was chaotic in Melbourne, hundreds of people looking for even the vaguest of information," Doug said.
($1 = 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; Writing by Anne Marie Roantree and Joanna Plucinska; Editing by Jamie Freed, Mark Potter and Susan Fenton
Source: Reuters