Airlines and travel stocks slump amid Middle East escalation
Published: 12:41 13 Jun 2025 BST
Shares in airlines and travel groups fell sharply on Friday as markets reacted to a major Israeli military offensive against Iran, which has fuelled fears of broader conflict in the Middle East.
International Consolidated Airlines Group SA (LSE:IAG), the owner of British Airways, dropped 5%, while easyJet PLC (LSE:EZJ) shed 4%. Intercontinental Hotels Group PLC (LSE:IHG), which has significant exposure to global travel trends, lost 2.3%.
The sell-off followed news that Israeli forces had launched strikes on “dozens” of targets across Iran, including nuclear facilities and missile sites.
The escalation came as Israel’s prime minister, Benjamin Netanyahu, declared that the multi-day operation, dubbed Rising Lion, aimed to “roll back the Iranian threat” and warned that Israeli citizens may need to shelter for extended periods.
Iran’s response included the launch of 100 drones toward Israel, while its supreme leader, Ali Khamenei, promised “severe punishment”. Western governments, including the UK, called for de-escalation, but investors rushed to reduce exposure to sectors vulnerable to geopolitical shocks.
Donald Trump’s assertion that further attacks could be “even more brutal” added to the market’s unease, prompting a flight to safety across global equities and a spike in oil prices.
