LONDON/SYDNEY >> Travel shares tumbled today, shedding $22.6 billion 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.
The UN’s International Civil Aviation Organization told countries they “have the responsibility to ensure the safety and security of air transport operations, facilities and passengers”.
Data showed that at least 4,000 flights had been cancelled worldwide in the past three days.
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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-19 pandemic. Jordan today 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.
The war hit U.S. airline shares today, with American Airlines and United Airlines down more than 3% in midday trading, paring losses from the morning. A group of 29 leading airlines, hotel and travel companies from Europe, Asia and North America shed a combined $22.6 billion in market value today, according to Reuters calculations.
Aviation analytics company Cirium said that at least 1,560 flights were cancelled today, meaning more than 4,000 have been cancelled since Saturday.
Shares in TUI, Europe’s largest travel company, were down 9.6% at 1302 GMT while Lufthansa declined by 5.7% and British Airways owner IAG lost 5.4%.
“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.
Travel technology company Navan said that thousands of employees from hundreds of companies are scheduled to travel to or from the Middle East this week while Marriott said its hotels in the region remain open.
Analysts highlighted rising fuel costs, cancellations and rerouting expenses as 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.
U.S. airlines do very little flying to the Middle East, with analysts at Jefferies estimating the region accounts for less than 1% of planned first-quarter capacity for American, United and Delta.
But fuel prices remain a risk, Jefferies analysts added, with S&P warning of the potential for the largest oil supply disruption in history if flows through the Strait of Hormuz remain low or are halted. On March 1 only five oil tankers transited the Strait, compared with around 60 tankers per day recently, according to S&P.
“If the reduction in tanker traffic continues for a week or so it will be historic,” said Jim Burkhard, S&P’s global head of crude oil research.
According to Jefferies, a 5% uptick in fuel costs could lower Delta and United’s 2026 earnings by 5–10%, while American Airlines’ profit could plunge by about 35%.
Some flights from Abu Dhabi’s Etihad resumed today, while Israel’s Ben Gurion Airport said it would reopen, albeit on a limited basis.
The UAE civil aviation authority will begin operating “special flights” domestically, state news agency WAM reported, to help some of the tens of thousands of stranded passengers to leave the region. But many Middle Eastern carriers continued to cancel or suspend flights.
Even before the conflict, the industry was under strain as cost-conscious travellers avoided pricey holidays. Norwegian Cruise Line Holdings today forecast weaker than expected 2026 profit.
Asian airline stocks were also hit, including Japan’s ANA Holdings, Air China, China Eastern Airlines and Malaysia’s AirAsia X, which all fell by 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 owing 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.
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, while 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 was 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 that 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.
Reporting by Byron Kaye and Hollie Adams in Sydney, Shivangi Lahiri and Yadarisa Shabong in Bengaluru, Joanna Plucinska, Josephine Mason and Samuel Indyk in London, Tim Hepher in Paris, Federico Maccioni in Dubai, Alessandro Parodi in Gdansk, Danilo Masoni in Milan, Rajesh Kumar Singh in Chicago, 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.