Airline stocks fell sharply, and airfares increased as the conflict involving the U.S., Israel, and Iran pushed oil prices above $100 per barrel.
Crude oil prices rose 15% to over $105 per barrel, levels last seen in 2022, driven by production cuts and concerns over shipping disruptions. Brent crude futures, at one point, increased by 29%.
Airline shares in Asia took a significant hit, with Korean Air Lines declining 8.6%, Air New Zealand 7.8%, and Cathay Pacific 5%. European airlines, including Air France KLM, British Airways-owner IAG, Wizz Air, and Lufthansa, saw declines of 2.5% to 6%. U.S. airlines’ stocks dropped between 1% and 5%, with JetBlue Airways falling 5.35%, and American Airlines 3.44%.
Ticket prices surged, exemplified by a flight from Seoul to London on March 11 with Korean Airlines rising to $4,359 from $564 a week earlier. LATAM Airlines’ fare from Los Angeles to Lima rose to $2,125 from $499. “Travel demand may be curtailed as costs become prohibitive for leisure travelers,” said Lorraine Tan, director of equity research, Asia at Morningstar, suggesting limited demand could persist through 2026.
Jet fuel, a high cost for airlines, has increased considerably.