“A widening conflict around the Strait of Hormuz could threaten to disrupt global airline traffic, particularly if flight restrictions to key transfer hubs in Qatar and the UAE were to occur,” Bloomberg Intelligence analysts Eric Zhu and George Ferguson wrote in an earlier note. Excluding local carriers, Indian airlines including IndiGo, Turkish Airlines and British Airways are among the most exposed, they wrote.
Shares of the major network carriers fell, including Air France-KLM, Deutsche Lufthansa AG and BA parent IAG SA in Europe. United Airlines and Delta Air Lines declined in US trading.
Singapore Airlines has halted flights to Dubai from the city-state since Sunday over security concerns.
British Airways diverted a Dubai-bound flight to Zurich after it reached Saudi Arabia’s airspace in the early hours of Sunday, according to data from Flightradar24. Another jet returned to Heathrow after going as far as Egypt.
The London-based carrier earlier halted routes to Bahrain through the end of the month due to operational constraints and airspace restrictions.
Asian airlines have also taken steps to safeguard passengers and crews. Japan Airlines Co. said earlier it would have flights between Tokyo’s Haneda airport and Doha avoid airspace above the Persian Gulf and Gulf of Oman. Air India will progressively avoid the use of certain airspace over the Persian Gulf in the coming days.
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Even before the US strikes, several American and European airlines had paused flights to the United Arab Emirates and Qatar after Israel started bombarding Iran.
The skies over large swaths of the Middle East have been restricted several times during the past 20 months, making flying through Israel, Jordan, Lebanon, Syria, Iraq and Iran difficult.
The closures have forced airlines to cancel flights on profitable routes, spend more on jet fuel and pass through countries they usually avoid like Afghanistan, as they avoid dangerous skies. It has also meant hundreds of disrupted flights and thousands of stranded passengers.
Israel has started to allow outbound flights after halting them since its latest attacks on Iran starting on June 13. Tel Aviv is expected to let about 1000 passengers per day leave the country from Ben Gurion Airport and Haifa.
The UK is organising a chartered flight for British nationals who want to leave Israel, while Germany sent a military transport plane to extract citizens and France said it also plans repatriation flights.
“Everything depends on how long this lasts,” Ziad Daoud, chief emerging markets economist at Bloomberg Economics, said of the fallout from the flight cancellations. “If there was a stoppage of flights for a day or two, there won’t be an impact, but if this is a prolonged thing then obviously it’s an issue.”
More to come
Bloomberg
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