Airline stocks are on a sharp decline after the conflict between Israel and Iran broke out last Friday, as escalating tensions in the Middle East weigh on global markets.
The attacks have been going on for four days, most recently with ballistic missiles going through Israel鈥檚 air defense systems and landing on Tel Aviv.
The barrel price of Brent crude oil rose by over 25% since the end of May to $76 before settling at around $73.
This rise in oil prices influenced airline stocks due to the higher fuel costs and potential oil supply problems. Fuel makes up a large portion of airlines鈥� operating costs.
Analysts say airlines may raise ticket prices to account for the rise in fuel prices, but that can also damage the demand.
By the end of May, Air France shares lost 15.6%, American Airlines 9.1%, United Airlines 5.8%, and Southwest Airlines 4.9%.
American Airlines withdrew its 2025 forecast due to travel demand concerns arising from US President Donald Trump鈥檚 tariffs. The airline shared its EBITDA forecast for the second quarter to be $0.5-$1, as the tariffs and high fuel costs put pressure on profitability.
Air Canada shares declined 3.5%, Delta Air Lines 2.8%, Lufthansa 1.4%, International Airlines Group 1.2%, China Southern Airlines 1%, and Ryanair 0.7%.
Ryanair鈥檚 post-tax profit for March 2023-24 came in at 1.92 billion euros (approximately $2.2 billion), but this figure declined 16% for March 2024-25.
The airline also lowered its previous 210 million passenger target due to the delayed deliveries from aircraft maker Boeing, now targeting 206 million passengers by March 21, 2026.
Air France, United Airlines, Delta Air Lines, and Ryanair suspended their flights to Tel Aviv due to the ongoing tensions.
By Burhan Sansarlioglu and Emir Yildirim
Anadolu Agency
energy@aa.com.tr