Tel Aviv: 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 ongoing for four days, most recently with ballistic missiles penetrating Israel's air defense systems and landing on Tel Aviv.

According to Anadolu Agency, 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 constitutes a significant portion of airlines' operating costs.

Analysts indicate that airlines may increase ticket prices to counter the rise in fuel prices, potentially affecting demand. By the end of May, shares of Air France fell by 15.6%, American Airlines by 9.1%, United Airlines by 5.8%, and Southwest Airlines by 4.9%.

American Airlines has withdrawn its 2025 forecast due to travel demand concerns arising from US President Donald Trump's tariffs. The airline reported its EBITDA forecast for the second quarter to be between $0.5 and $1, as tariffs and high fuel costs put pressure on profitability.

Air Canada shares declined by 3.5%, Delta Air Lines by 2.8%, Lufthansa by 1.4%, International Airlines Group by 1.2%, China Southern Airlines by 1%, and Ryanair by 0.7%.

Ryanair's post-tax profit for March 2023-24 was 1.92 billion euros (approximately $2.2 billion), but this figure is expected to decline by 16% for March 2024-25. The airline also reduced its previous passenger target from 210 million to 206 million by March 21, 2026, due to delayed deliveries from aircraft maker Boeing.

Air France, United Airlines, Delta Air Lines, and Ryanair have suspended flights to Tel Aviv due to the ongoing tensions.