Indian airlines and travel stocks crash amid US-Iran war
What's the story
Shares of Indian airlines and travel companies have witnessed a major crash on Monday, with the likes of Ixigo falling by as much as 13.5%. The massive decline comes after the US and Israel launched attacks on Iran, resulting in airspace restrictions across key Middle Eastern countries. The development has severely disrupted flight operations and travel routes. Major transit hubs such as Dubai have been affected, leading to flight cancellations and advisories for passengers.
Market impact
Ixigo drops by 13.5%, IndiGo falls by 7.5%
The stocks of major airlines like InterGlobe Aviation (IndiGo's parent company) and SpiceJet, as well as online travel companies such as Ixigo and Easy Trip Planners. IndiGo's shares crashed by 7.5% to a day's low of ₹4,461 on the Bombay Stock Exchange (BSE), while SpiceJet's shares fell by nearly 9% to ₹14.68 each. Easy Trip Planners tanked as much as 9% to their day's low of ₹7.8 per share.
Flight cancelations
IndiGo cancels all flights to Middle East
IndiGo, the largest airline in India by market share, has canceled all flights to and from the Middle East. The decision was announced as a precautionary measure in a travel advisory issued to passengers. "In an endeavor to provide support to our customers, we are extending full flexibility and waivers for travel to/from the Middle East and select international sectors until March 7, 2026," said IndiGo.
Sector impact
Impact on travel and tourism sector
The ongoing geopolitical tensions are likely to negatively affect travel and tourism stocks. Flight disruptions, rerouting, and cancellations could increase operating costs for airlines, especially fuel and crew expenses. At the same time, heightened geopolitical uncertainty may reduce travel demand, resulting in booking cancelations and slower new reservations. This could put pressure on revenues and near-term earnings visibility across the sector.
Regional impact
Multiple countries have closed their airspace since the conflict began
The conflict between Israel, the US, and Iran has led to multiple airspace closures across the Middle East. At least eight countries have closed their skies since the conflict erupted on Saturday. These include Iran, Israel, Iraq, Jordan, Qatar, Bahrain, Kuwait and the United Arab Emirates (UAE). Syria also announced partial closure of its southern airspace along the Israeli border.