Major Asian Airlines Stocks Fall Amid Regional Tensions and Disrupted Air Travel
Shares of major Asian airlines experienced a sharp decline on Monday, following US and Israeli strikes on Iran that intensified regional tensions. Hong Kong’s Cathay Pacific, Australia’s Qantas Airways, Singapore Airlines, and Japan Airlines saw drops of more than 5% in early trade. Qantas, although not operating direct flights to the Middle East, saw a decrease of 10. 4% at the open before recovering to around 6%.
The disruption of air travel and a rise in oil prices were attributed to the attacks in the region, leading to concerns over supply from key producing areas. This resulted in a 7% increase in oil prices, reaching their highest levels in months. As aviation is greatly affected by fluctuations in crude prices, this contributed to a decline in airline stocks.
Other major Asian airlines, including ANA Holdings, Air China, China Southern Airlines, China Eastern Airlines, AirAsia X, China Airlines, and EVA Airways, also saw a decrease of at least 4% in their stocks.
The disruption of air travel has been ongoing for three consecutive days, with major transit hubs such as Dubai and Doha facing closures or restrictions. In 2024, Dubai was the busiest international airport in the world, handling 92 million passengers, while Doha ranked tenth.
Cathay Pacific announced the cancellation of all flights to the Middle East, including services to Dubai and Riyadh, until further notice. They also waived rebooking fees for affected passengers. Similarly, Singapore Airlines suspended flights to and from Dubai until March 7, and Japan Airlines halted its Tokyo-Doha route.
Air India also made changes due to the regional tensions, cancelling flights to Zurich, Copenhagen, and Birmingham, as well as services to the United Arab Emirates, Saudi Arabia, Israel, and Qatar. They also announced that flights to New York and Newark would now refuel in Rome due to route changes.
VariFlight, a data provider, reported that Chinese carriers had cancelled 26. 5% of flights to and from the Middle East between March 2 and March 8.
The disruption in air travel also affected passengers worldwide, with rerouted or cancelled flights causing confusion and delays at airports. In Australia, Virgin Australia cancelled eight flights to Doha operated in partnership with Qatar Airways and offered free booking changes.
Passengers reported experiencing confusion and delays at airports as airspace closures forced flight diversions and cancellations. Airlines are continuing to monitor the situation as the duration of the conflict and its impact on global aviation and fuel markets remains uncertain.