LONDON – Travel shares fell sharply on Monday as escalating conflict between the US, Israel and Iran disrupted flights around the globe, forced the closure of key Middle Eastern hubs and sent oil prices surging.
Middle Eastern airports including Dubai, the world’s busiest international hub, and Doha closed for a third day, leaving tens of thousands of passengers stranded in one of the sharpest aviation shocks in recent years.
Shares in TUI, Europe’s largest travel company, dropped 7% in early trade, while British Airways-owner IAG was down 9%, and Lufthansa and Air France-KLM both fell 7%. Hotelier Accor and cruise company Carnival also fell sharply.
US airline shares dropped around 5% in pre-market trading.
Analysts cited rising fuel costs, cancellations and rerouting expenses as the main pressure points for airlines, despite most having hedged their fuel.
“We believe that an active war zone, along with the resulting flight disruptions (due to closure of airspace and airports), is likely to curb travel appetite in the region,” said B Riley Securities in a note.
Middle Eastern carriers continued to cancel flights on Monday as analysts warned that disruption could last for weeks.
“Due to the temporary closure of UAE airspace, flydubai has temporarily suspended all flights to and from Dubai until 15:00 (UAE local time) on Tuesday 03 March 2026,” a spokesperson for the airline said.
