Airline shares rebounded on Thursday as limited flights resumed from Middle East, offering relief to carriers that lost billions of dollars in market value following US-Israeli strikes on Iran earlier this week.

Governments scrambled to arrange evacuation flights for tens of thousands of citizens stranded after intensifying US-Israeli conflict closed most regional airspace due to missile risks. Closure affected major aviation hubs including Dubai, world’s busiest international airport handling over 1,000 flights daily.

Hong Kong’s Cathay Pacific Airways closed up 2.2%, Qantas Airways rose 1% and Korean Air Lines jumped 5.6% on Thursday. Japan Airlines closed down 1%, paring weekly losses. Major Chinese carriers including Air China, China Eastern Airlines and China Southern Airlines fell between 1% and 4% in Hong Kong and Shanghai as markets stabilised.

Gary Ng, senior economist at Natixis, told media Asian airlines remain highly sensitive to Iran situation due to route exposure and energy costs. “Any news on shortening war duration can easily turn sentiment”, Ng said.

Emirates and Etihad Airways now operate limited services from Dubai and Abu Dhabi through United Arab Emirates’ safe air corridors. Qatar Airways announced limited relief flights from Thursday for stranded passengers departing Muscat to six European destinations including London, Berlin and Rome, plus Riyadh to Frankfurt service.

These mark Qatar Airways’ first flights since Saturday when Doha hub shut after Iran strikes, according to flight-tracking service Flightradar24. By Thursday morning, Emirates flights departed Dubai for Sydney, Hong Kong, Paris, Amsterdam, Toronto and Mumbai, though vast majority of services remained cancelled.

Dubai airport recorded 161 take-offs and landings on Wednesday, nearly double previous day’s total, Flightradar24 confirmed.

US State Department said that government charter flight was bringing Americans home from Middle East, with additional flights being arranged from other regional locations. Since February 28, over 17 thousand 500 Americans returned to United States from Middle East. Canada announced efforts to repatriate stranded citizens on commercial and charter flights.

Escalating conflict reduced world’s air cargo capacity by over one-fifth and drove up freight rates significantly. Jet fuel prices soared globally since Iran strikes, hitting all-time high in Singapore on supply disruption concerns, S&P Global Platts reported Thursday.

Kenny Ng, securities strategist at China Everbright Securities International, cautioned rebound remains primarily short-term. “Its sustainability will still depend on ongoing situation in Iranian conflict”, Ng said.

New York Times reported Iran’s Ministry of Intelligence operatives signalled openness to CIA talks on ending war, citing officials briefed on matter. Airspace restrictions forced airlines to reroute flights, load extra fuel or make additional refuelling stops. Stranded tourists and expatriates sought alternative routes through Saudi Arabia or Oman, where airspace remains open.

Source: Reuters