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 per cent 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 per cent to the lowest level in 10 months when the market opened in Australia on Monday, before paring some losses to trade down about 6 per cent, 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, Air China , China Southern Airlines, China Eastern Airlines , Malaysia's AirAsia X and Taiwan's China Airlines and EVA Airways all fell at least 4 per cent.
"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.
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 per cent before paring losses to 2.9 per cent, 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 to 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 are 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 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 per cent 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.
