Airline shares plunged on Monday, with Hong Kong’s Cathay Pacific 0293.HK, Australia’s Qantas Airways QAN.AX, Singapore Airlines SIAL.SI and Japan Airlines 9201.T down more than 5% after the U.S. and Israel launched weekend strikes on Iran, disrupting travel and sending oil prices surging.

Global air travel remained in turmoil as war in Iran forced the closure of key Middle Eastern hubs, including Dubai and Doha, for a third day, stranding tens of thousands of passengers worldwide.

Oil prices surged 7% to their highest in months as Iran and Israel stepped up attacks in the Middle East, damaging tankers and disrupting shipments from the key producing region.

Shares in Qantas fell 10.4% to the lowest level in 10 months when the market opened in Australia, before paring some losses to trade down about 6%, even though it does not fly to the Middle East and instead relies on a codeshare partnership with Dubai’s Emirates.

Shares in other Asian carriers, including Japan’s ANA Holdings 9202.T, Air China 0753.HK601111.SS, China Southern Airlines 600029.SS, China Eastern Airlines 600115.SS, Malaysia’s AirAsia X AIRX.KL and Taiwan’s China Airlines 2610.TW and EVA Airways 2618.TW all fell at least 4%.

“The sharp sell-off in Asian airline shares reflects market concerns over higher fuel costs, flight cancellations, and incremental costs from rerouting flights following airspace and airport closures,” said Morningstar equity analyst Nicole Lim.

But she said most Asian airlines had partially hedged their fuel price exposure, cushioning the impact of short-term spikes, and some carriers could benefit from bookings by travellers displaced by cancelled flights.

Cathay Pacific, whose shares fell as much as 7% before paring losses to 2.9%, said it had cancelled all of its flights to the Middle East, which include passenger services to Dubai and Riyadh, until further notice.

“We are waiving rebooking and rerouting charges for the affected customers,” it said.

Singapore Airlines cancelled flights to and from Dubai through March 7, while Japan Airlines suspended its Tokyo-Doha flights for the time being.

“For (East) Asian carriers, the number of flights they have to the airports that have been shut is rather limited,” said Singapore-based independent aviation analyst Brendan Sobie. “But of course you have the potential impact of higher oil prices and the overall political/economic instability globally.”

He added that Indian carriers were at a particular disadvantage given their heavy Middle Eastern flying schedules catering mostly to migrant workers and a ban on using Pakistan’s airspace affecting their flights to and from Europe.

Air India said its flights between India and Zurich, Copenhagen and Birmingham were cancelled on Monday alongside those to the United Arab Emirates, Saudi Arabia, Israel and Qatar. It added that Air India flights to New York and Newark would stop in Rome to refuel.

Data provider VariFlight said airlines in mainland China had so far cancelled 26.5% of flights to and from the Middle East from March 2 to March 8.

“Overall, the pattern points to sharp near-term disruption but relatively limited revisions further out in the week, suggesting carriers are still holding back from broader schedule resets while monitoring developments,” VariFlight said.

The ripple effects of the Middle Eastern conflict have impacted travellers across the world.

Dubai was the world’s busiest international airport in 2024, according to Airports Council International, with its 92 million travellers topping London’s Heathrow by 13 million. Doha was the world’s 10th busiest international airport that year.

Virgin Australia VGN.AX, which leases planes operated by partner Qatar Airways for flights to Doha, said it had cancelled eight flights on Monday and was offering free booking changes.

Qatar Airways passengers at Sydney Airport interviewed by Reuters said they were left scrambling to change plans with no guidance from the airline.

Ascanio Giorgetti, 16, and his mother Alessandra Giorgetti, from Italy, arrived at Sydney Airport only to learn their Qatar Airways flight to Milan, via Doha, was cancelled without explanation.

They found an alternate route home, travelling a longer way via Los Angeles, on a different airline.

“We have no information at all, no answer on the phone from Qatar (Airways),” said Alessandra Giorgetti, who added the Qatar Airways flights had cost 4,000 euros ($4,708.40).

Jenni and Doug Stewart, both 78, were travelling from Sydney to their home in Scotland via Doha when their flight turned around halfway to Doha.

“We were told the airspace had closed and we were going back to Sydney,” Jenni Stewart said. “Suddenly we veered towards Perth and we didn’t know why, and then it changed again and went to Melbourne.”

They then caught a separate flight back to Sydney, where they were seeking information.

“It was chaotic in Melbourne, hundreds of people looking for even the vaguest of information,” Doug Stewart said.

($1 = 0.8495 euros)