Shares in the travel sector fell on Monday, losing $22.6 billion, as the escalating conflict between the United States, Israel, and Iran disrupted flights worldwide, closed major Middle Eastern hubs, and sent oil prices soaring, with analysts warning of weeks of disruptions.
The International Civil Aviation Organization (ICAO) of the United Nations has told countries that they “have a responsibility to ensure the security and safety of air transport operations, infrastructure, and passengers.”
The Gulf’s main platforms, including the world’s busiest airport, Dubai, which usually handles over 1,000 flights per day, remained closed for the third day. Tens of thousands of passengers were left stranded, with aviation facing its biggest challenge since the COVID-19 pandemic.
Oil prices surged by up to 13% to their highest level since January 2025, as Iran and Israel intensified their attacks, raising the prospect of increased fuel costs for airlines.
The war dragged down shares of American airlines on Monday, with Delta Air Lines, United Airlines, and American Airlines dropping 2 to 4%. According to Reuters calculations, a group of 29 major airlines, hotels, and travel companies from Europe, Asia, and North America lost $22.6 billion in market value on Monday.
TUI, the largest European tour operator, saw its shares close down by 9.9%, while German Lufthansa fell by 5.2% and British Airways owner IAG lost 5.5%.
“All airlines are full, and all flights are full because people have to take what they can,” said Paul Charles, director of travel consultancy PC Agency, who himself was stuck abroad.
Travel technology company Navan said thousands of employees from hundreds of companies were due to travel to or from the Middle East this week, while Marriott said its hotels in the region remained open.
Analysts highlighted that rising fuel costs, cancellations, and rerouting fees were pressure points for airlines, despite hedging operations. JPMorgan, Goodbody, and Citi identified Wizz Air as the European carrier most exposed due to its strong presence in Israel.
American airlines operate very few flights to the Middle East, with Jefferies analysts estimating that the region represents less than 1% of the planned capacity for the first quarter for American, United, and Delta.
But fuel prices remain a risk, with Jefferies analysts warning of the potential for the greatest oil supply disruption in history if flows through the Strait of Hormuz remain low or are interrupted. As of March 1, only five tankers had passed through the strait, down from around sixty per day recently, according to S&P.
“If the reduction in tanker traffic continues for a week or two, it will be historic,” said Jim Burkhard, S&P Global’s global head of crude oil research.
According to Jefferies, a 5% increase in fuel costs could reduce Delta and United’s profits by 5 to 10% in 2026, while American Airlines’ profits could drop by around 35%.
LIMITED FLIGHTS
A limited number of Etihad Airways flights from Abu Dhabi resumed on Monday, while Ben Gurion Airport in Israel announced its reopening, albeit on a limited basis.
The United Arab Emirates Civil Aviation Authority will start operating “special flights,” according to the WAM national news agency, to help some of the tens of thousands of stranded passengers leave the region. Many Middle Eastern carriers continued to cancel or suspend their flights.
Even before the conflict, the sector was under strain, with budget-conscious travelers avoiding expensive vacations. Norwegian Cruise Line Holdings predicted lower-than-expected profits for 2026.
Asian airlines’ stocks were also affected, with Singapore Airlines, Cathay Pacific Airways, Qantas Airways of Australia, and Japan Airlines all closing down by at least 4% on Monday.
Cathay Pacific canceled all flights to the Middle East, including to Dubai and Riyadh, and waived rebooking fees.
Singapore Airlines canceled its flights to and from Dubai until March 7, while Japan Airlines suspended its Tokyo-Doha flights.
Independent aviation analyst Brendan Sobie based in Singapore said Indian carriers were particularly exposed due to their busy schedules to the Middle East, where they serve migrant workers, and the ban on using Pakistani airspace for flights to and from Europe.
HASTY FLIGHT CHANGES
The knock-on effects have affected travelers worldwide. According to the Airports Council International, Dubai was the world’s busiest international airport in 2024, with 92 million passengers, surpassing London’s Heathrow Airport by 13 million passengers. Doha ranked tenth.
Lufthansa canceled passenger flights to and from the United Arab Emirates, while passengers on Qatar Airways to Sydney told Reuters they were scrambling to rearrange their travel in the absence of information.
Sixteen-year-old Ascanio Giorgetti and his mother Alessandra Giorgetti from Italy had their flight to Milan via Doha canceled. They found an alternative route home through Los Angeles on another airline.
“We have no information, no answers when we call Qatar Airways,” she said, adding that the tickets cost 4,000 euros ($4,708).
Seventy-eight-year-olds Jenni and Doug Stewart were flying from Sydney to Scotland via Doha when their flight was turned back to Melbourne before returning to Sydney. “We were told the airspace was closed,” Jenni said. “It was chaos in Melbourne, hundreds of people were looking for any information,” Doug added.
