HONG KONG, March 5 — Airline shares rebounded on Thursday, as more flights took off from the Middle East, giving carriers some reprieve after US-Israeli strikes on Iran wiped billions of dollars off their market value earlier in the week.
Governments have scrambled to arrange flights out of the Middle East for tens of thousands of citizens stranded by the intensifying US and Israeli conflict that closed most of the region’s airspace due to the risk of missiles hitting planes.
Shares in Hong Kong’s Cathay Pacific Airways closed up 2.2 per cent, Qantas Airways rose 1 per cent and Korean Air Lines jumped 5.6 per cent. Japan Airlines closed down 1 per cent, paring the week’s losses.
Major Chinese carriers such as Air China, China Eastern Airlines and China Southern Airlines fell between 1 per cent and 4 per cent in both Hong Kong and Shanghai as they stabilised.
“Asian airlines are highly sensitive to Iran’s situation due to exposure through routes and energy in both revenue and costs. Any news on shortening the duration of the war can easily turn sentiment,” said Gary Ng, a senior economist at Natixis.
Ticket prices soared on popular routes such as Australia to Europe after the closure of Dubai, the world’s busiest international airport, which normally handles more than 1,000 flights a day.
Emirates and Etihad Airways are now operating a limited number of services from Dubai and Abu Dhabi through the United Arab Emirates’ safe air corridors.
Qatar Airways said it would run limited relief flights from Thursday for stranded passengers departing from Muscat in Oman to six European destinations including London, Berlin and Rome as well as from Riyadh to Frankfurt.
These would be the airline’s first flights since Saturday, when its Doha hub was shut after the strikes on Iran, according to flight-tracking service Flightradar24.
By Thursday morning, Emirates flights had left Dubai for destinations such as Sydney, Hong Kong, Paris, Amsterdam, Toronto and Mumbai, data from the tracking service showed, though the vast majority of services remained cancelled.
The number of take-offs and landings at Dubai airport totalled 161 on Wednesday, Flightradar24 said, nearly double those of the previous day.
A US government charter flight was bringing Americans home from the Middle East, with additional flights being arranged from other regional locations, the US State Department said.
Since February 28, more than 17,500 Americans have returned to the United States from the Middle East.
Canada said it was working to repatriate stranded citizens on commercial flights and contracting charter flights.
In addition to upending travel, the escalating Middle East conflict has also reduced the world’s air cargo capacity by more than a fifth and driven up freight rates.
Asian airline shares rebound
Jet fuel prices have soared globally since the strikes on Iran, hitting an all-time high in Singapore on concerns of supply disruption, S&P Global Platts said on Thursday.
Nevertheless, many Asian airline shares rebounded from double-digit percentage drops in the past few days amid concerns over how long the conflict might last and the impact of surging oil prices.
“For now, I consider this rebound to be primarily short-term in nature, and its sustainability will still depend on the ongoing situation in the Iranian conflict,” said Kenny Ng, a securities strategist at China Everbright Securities International.
In a sign of possible relief, operatives from Iran’s Ministry of Intelligence signalled openness to the US Central Intelligence Agency (CIA) to talks on ending the war, the New York Times said, citing officials briefed on the matter.
The restrictions on airspace forced airlines to reroute flights, load extra fuel or make additional refuelling stops to guard against sudden diversions or longer flights on safer routes.
Marooned tourists and some expatriates have also tried to find their own way out of the Middle East through Saudi Arabia or Oman, where the airspace remains open. — Reuters
