Asian airline stocks slide over 5% as Middle East conflict disrupts flights, lifts oil

Shares of major Asian airlines fell sharply on Monday after US and Israeli strikes on Iran intensified regional tensions, disrupting air travel and pushing oil prices higher.

Hong Kong’s Cathay Pacific, Australia’s Qantas Airways, Singapore Airlines and Japan Airlines declined more than 5% in early trade. Qantas dropped as much as 10.4% at the open before trimming losses to around 6%, despite not operating direct flights to the Middle East.

Oil prices rose about 7% to their highest levels in months as attacks in the region disrupted shipments and heightened concerns over supply from key producing areas. Higher fuel costs weighed on airline stocks, given aviation’s sensitivity to crude price movements.

Shares of ANA Holdings, Air China, China Southern Airlines, China Eastern Airlines, AirAsia X, China Airlines and EVA Airways also fell at least 4%.

Global air travel remained disrupted for a third consecutive day as major transit hubs, including Dubai and Doha, faced closures or restrictions. Dubai was the world’s busiest international airport in 2024, handling 92 million passengers, while Doha ranked tenth.

Cathay Pacific said it had cancelled all flights to the Middle East, including services to Dubai and Riyadh, until further notice and waived rebooking fees for affected passengers. Singapore Airlines suspended flights to and from Dubai through March 7, while Japan Airlines halted its Tokyo–Doha route.

Air India cancelled flights to Zurich, Copenhagen and Birmingham, as well as services to the United Arab Emirates, Saudi Arabia, Israel and Qatar. It also announced that flights to New York and Newark would refuel in Rome due to route changes.

Data provider VariFlight said Chinese carriers had cancelled 26.5% of flights to and from the Middle East between March 2 and March 8.

Passengers worldwide were affected as airlines rerouted or cancelled flights. In Australia, Virgin Australia cancelled eight flights to Doha operated in partnership with Qatar Airways and offered free booking changes.

Travellers reported confusion and delays at airports as airspace closures forced flight diversions and cancellations. Airlines continued to monitor the situation amid uncertainty over the duration of the conflict and its impact on global aviation and fuel markets.