- Airline shares stabilise after significant losses.
- Skies over swathes of Middle East still empty.
- Worst crisis for global travel industry since Covid-19.
Dozens of repatriation flights were due to depart from the Middle East on Wednesday as governments hurried to bring tens of thousands of stranded citizens home in the midst of an intensifying US and Israeli conflict with Iran.
Skies over most of the Middle East remained empty of commercial planes on Wednesday, with major Gulf hubs, including the world’s busiest international airport in Dubai, largely shut for a fifth day, in the biggest travel disruption since the Covid-19 pandemic.
The first repatriation flights were due to leave for Britain and France on Wednesday, and the United Arab Emirates opened special corridors to allow some citizens to return home. Normally, thousands of commercial flights would take off from the region daily.
Marooned tourists and some expatriates have also tried to find their own way out.
“We’re doing this cautiously,” said French Finance Minister Roland Lescure. The French government said several repatriation flights for its citizens, around 400,000 of whom are in the region, were planned for Wednesday.
A British chartered flight will leave Oman on Wednesday evening, prioritising vulnerable UK nationals, the British Foreign Office said.
Emirates, the world’s largest international carrier, said all routes to and from Dubai remain suspended until March 7 and it was operating a “limited” flight schedule from Dubai International and from Maktoum International.
The New Zealand government said it expected a total of 121 repatriation flights to depart from Dubai International Airport on Wednesday.
Qantas, meanwhile, was running extra flights to bring British people stuck in Australia back home, but would have to route them via a refuelling stop in Singapore as an alternative to the normal Middle East hubs.
With airspace severely constrained, many airlines are carrying extra fuel or making additional refuelling stops to guard against sudden rerouting or longer flight paths through safer corridors.
Airline shares were less volatile on Wednesday after double-digit percentage drops in the past few days, which wiped tens of billions of dollars from airlines’ market value.
Lufthansa was up 3% at 1306 GMT, while Qantas closed down 2.7% lower, having lost more than 10% of their value so far this week. BA-owner ICAG was up 2%, having fallen more than 13% in the past three days.
Airline executives have said that crew and pilots are now scattered across the world, complicating the process of resuming flights when airspace reopens. Soaring prices of oil will also add to carriers’ costs.
Analysts said flights will become more expensive if longer routes become the only options for international carriers.
The Gulf is also a major hub for air cargo, putting further pressure on international trade routes following the disruption of Red Sea shipping routes.
Asian airline stocks
Shares of US carriers United Airlines, American Airlines and Delta Air Lines were all up about 1% in pre-market trading, while Southwest Airlines shares were marginally lower.
Most Asian airline shares pared losses from earlier this week, though Korean Air Lines shares fell 7.9% after dropping 10.3% on Tuesday.
South Korea’s stock market was closed on Monday when most airline and travel stocks bore the brunt of the impact from the conflict.
Oil prices have risen sharply this week, with Brent crude oil up around 14% since the US-Israeli strikes on Iran, potentially pushing up fuel costs for airlines.
Hedging is expected to help mitigate some of the cost increases.
“Recent guidance indicates that the airlines have hedged around 50% of their jet fuel needs. In general, they should be able to pass through the balance of the price rise to passengers,” Lorraine Tan, director of equity research for Asia at Morningstar, said.
