By Aimee Look
Airlines stocks slumped as the conflict in the Middle East disrupted operations across the region, crippling travel through some of the world's most crowded transit arteries.
The escalation of the regional conflict shuttered airports, sparking one of the most drastic shocks to the industry since the Covid-19 pandemic, with the spillover affecting international carriers.
European operators--many of which use Dubai as a stopover or final destination--halted flights to and from many regional airports. Air France-KLM, British Airways owner IAG and Lufthansa all typically run at least one flight a day to Dubai.
Shares in IAG and Air France-KLM fell around 7% and Lufthansa was down 6% in early European trading on Monday.
Dubai-based Emirates airlines said it was temporarily suspending all operations to and from Dubai until 3 p.m. UAE time on Tuesday due to multiple airspace closures. Qatar Airways said it halted flight operations for the foreseeable future because of the closure of the Qatari airspace. Etihad Airways also suspended flights until 2 p.m. on Monday.
Smaller airliners like easyJet dropped 4.5%, while Wizz Air fell around 7%. Budget airliner Wizz Air might be the most exposed to conflict in the region, as it has significant direct exposure to Israel, Citibank's Conor Dwyer wrote in a note.
European airlines might also face higher fuel costs amid potential oil price hikes due the conflict, Dwyer said.
Dubai International Airport--last year ranked as the world's busiest airport--halted all operations until further notice. Effects of the closure will spill over and affect the industry as a whole, since the airport acts as a layover hot spot for flights from North America to Asia.
Iranian drones have struck some airports in the region. A hit to Dubai airport on Sunday injured four staff members, while falling debris from a drone interception on the Zayed International Airport in Abu Dhabi killed one, the state-run WAM news agency reported.
Located further away from the heart of the conflict, planes continued to fly out of Saudi Arabia's biggest airports and across the country--providing an alternative route for exit. Saudia Airlines halted a string of flights, but planes continue to fly over the country, according to flight tracking service Flightradar24.
Write to Aimee Look at aimee.look@wsj.com
(END) Dow Jones Newswires
March 02, 2026 04:41 ET (09:41 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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