Airline share prices worldwide have declined sharply since joint US-Israeli strikes on Iran began on February 28, 2026. Investors anticipate higher jet fuel costs and network disruptions in the Middle East, leading to longer routings, flight cancellations, and demand uncertainty.
Jet fuel prices reached multi-year highs, with spot markets showing large premiums over crude oil, pressuring margins especially for airlines with limited hedging. Qantas shares fell over 10% in one session, while European carriers dropped around 5% or more as oil prices surged. In the US, as of March 5, Delta Air Lines was down 7%, United Airlines and American Airlines about 10% each, Southwest 10%, Alaska Air Group 15%, and JetBlue 17% from February 27 closes. Carriers with weaker balance sheets or less network flexibility, like JetBlue and Alaska, experienced steeper declines.
Asian markets reacted strongly, with Singapore Airlines down 4.5%, Qantas 5.4%, Cathay Pacific 2.8%, and Japan Airlines 5.6%. Airlines canceled hundreds of flights, including Singapore Airlines’ 16 flights on the Singapore-Dubai route from February 28 to March 7. Airports in Doha, Dubai, and Abu Dhabi halted operations after damage from Iranian missile retaliation into the UAE. Brent crude hit $82.37 per barrel, up over 10%, and West Texas Intermediate reached $75.33.
Middle East airspace closures prompted thousands of cancellations. Jet fuel, comprising 20-30% of airline costs, continues to rise, with US travel stocks sliding amid gas prices nearing $3 per gallon.