Main points
- Due to the escalation of the conflict in the Middle East, flights are being canceled en masse, which has led to a collapse in the shares of global airlines.
- Shares of companies such as Emirates, Etihad Airways, and Qatar Airways are falling, and the situation is complicated by rising oil prices and US statements about continued strikes on Iran.
Shares of world airlines are falling / Collage by Channel 24, photo by Reuters, AFP
Due to the worsening situation in the Middle East, flights are being canceled en masse in Qatar, Bahrain, and cities in the UAE. As a result, shares of global airlines are collapsing.
How are airline stocks falling due to the situation in the Middle East?
The travel industry has been plunged into chaos – flights are being canceled en masse, airspace is being closed, and airline stocks are plummeting, writes Bloomberg.
- The world's largest international airline, Emirates , has suspended all flights to and from Dubai until 3:00 p.m. local time on March 3.
- Etihad Airways also continued to cancel flights;
- Instead, Qatar Airways announced that flights to and from Doha were completely suspended due to the closure of Qatari airspace.
- Cathay Pacific cancels some flights to the Middle East until March 54
- And India's IndiGo extended flight restrictions until Tuesday.
The stock markets reacted immediately to these events. In Europe, shares of Deutsche Lufthansa AG fell 11%, shares of holding company IAG SA fell 13%, and Air France-KLM lost 10% at the start of trading. Investors are nervous: the summer season is ahead – a key period for the industry, and the conflict could seriously affect travel demand.
An additional blow is the sharp jump in oil prices. Fuel is a major expense for airlines, and if planes also have to fly around closed areas, routes become longer and more expensive.
The situation was exacerbated by US President Donald Trump's statement that strikes on Iran would continue until the set goals were achieved. After that, the markets became even more nervous:
- In Asia, Cathay Pacific shares fell 7% at the opening of trading in Hong Kong;
- Singapore Airlines shares fell 7.5%;
- And Qantas Airways lost up to 10%.
How did Iran's attacks paralyze businesses?
The consequences of the crisis events threaten global trade, tourism and logistics in a critically important economic hub of the world, writes Reuters.
- Governments and businesses in the UAE, Saudi Arabia, Kuwait, Qatar and other Gulf countries have come under pressure due to the closure of airports and ports, which has significantly affected international supply chains and logistics.
- Companies were advised to switch to remote work by March 3 due to safety risks and uncertainty.
- Tourism , a key part of the Gulf economy, has also been severely affected, with hotels, resorts and networking events cancelled or postponed.
- Stock indices in Saudi Arabia, Oman, Kuwait and Egypt fell significantly, while some oil companies, on the contrary, showed growth amid fears of energy shortages.
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Conflict between the US, Israel and Iran: latest news
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On the evening of March 1, an Iranian drone hit a key British air force base in Cyprus, Akrotiri. This was the first time Iran had attacked a European country.
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Donald Trump has turned his Mar-a-Lago estate into a command center for strikes on Iran. Trump is overseeing the Middle East campaign from his Florida estate with national security officials.
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The Ras Tanura refinery in Saudi Arabia has been shut down by an Iranian drone attack. The Ras Tanura refinery, owned by Saudi Aramco, has a capacity to process about 550,000 barrels of crude oil per day.
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US President Donald Trump announced the deaths of three American service members during Operation Epic Fury against Iran. Trump said the death toll could rise, but the US plans to respond strongly to terrorist attacks.