Impact on Major Airlines Across Europe and Asia
Investor anxiety has escalated due to flight disruptions and increased insurance premiums caused by the Middle East conflict, affecting airline stocks since June 12.
European Airlines
- Lufthansa’s stocks dropped by 0.39% to €7.05.
- Air France-KLM experienced a 0.23% decline, trading at €8.63 per share.
However, IAG, the parent company of British Airways, saw a slight increase of 0.46% to €331.
Low-Cost European Airlines
Easyjet, Ryanair Holdings, and Wizz Air faced significant drops of 6.01%, 11.80%, and an unspecified percentage, respectively.
Asian Airlines
Japan Airlines and ANA Holdings reported declines of 0.86% and 0.72%, respectively.
Air Arabia, the sole Middle Eastern airline listed in the Persian Gulf (Sharjah, UAE), saw a 0.87% increase.
US Airlines
JetBlue Airways, a low-cost US airline, suffered an 11.39% drop in stock prices.
Boeing, the US-based aircraft manufacturer, experienced a 2.32% decline, while Delta Air Lines saw a 1.17% decrease.
Reasons for the Stock Declines
According to XTB market analyst Javier Cabrera, the surge in oil prices threatens aviation sector profits. Additional factors include potential route changes, reduced tourism in the region, and a recent Boeing plane crash in India.
Cabrera emphasized that the situation directly impacts the tourism sector, which includes several global companies, particularly in Europe.
Flight Disruptions and Route Changes
Airlines canceled flights and rerouted aircraft after several Middle Eastern countries temporarily closed their airspaces following Iran’s attack on the US military base in Al Udeid, Qatar.
Volatile Energy Markets
The bombings between Israel and Iran negatively affected energy prices, further impacting airlines.
- Crude oil Brent prices surged by 13.68% between June 12 and 19.
- West Texas Intermediate (WTI) rose by 12.96% during the same period.
However, prices plummeted during the last week, with WTI falling 15.53% and Brent dropping 14.61% from June 20 to 25 (Source: Reuters).
