Breaking News: Dubai Airport Stops All Flights as Drone Attack Hits Airline Stocks

The world’s busiest international airport came to a complete stop on Monday. Dubai International Airport (DXB) had to shut down after a drone strike started a fire at a fuel tank. This shutdown is a huge deal for global travel, as Dubai is the main stopover for millions of people flying between the West and the East. Because of the danger, planes are being grounded, and the cost of flying is jumping.

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Emirates Parks Its Planes at Its Main Hub

Since Dubai is the home of Emirates, the airline had to cancel every flight going in or out. This has left thousands of people stuck in airports around the world. Because so many international flights connect through Dubai, this shutdown is causing a domino effect that is slowing down travel in Europe, Asia, and Africa. Other nearby airlines, like Qatar Airways, are also being very careful and flying fewer planes to stay safe.

U.S. Airlines Face High Costs

The problems in Dubai are quickly reaching the U.S. stock market. Experts are worried that even a small rise in fuel prices will hurt the profits of companies like Delta Air Lines DAL +1.45% ▲ and United Airlines UAL +0.08% ▲ . Some analysts think American Airlines AAL -2.37% ▼ is in the most danger, with profits potentially falling by 35% if oil stays this expensive. Shares for these big companies have already dropped nearly 20% in the last week.

European Airlines Change Their Routes

In Europe, airlines are also struggling. Lufthansa (LHA) has already cut back on its flights to the Middle East. Meanwhile, the Dutch airline KLM said it will not fly to Dubai at all for the next two weeks. These airlines now have to fly longer, more expensive paths to stay away from the conflict zone. This uses much more jet fuel, which is getting more expensive every day.

Low-Cost Carriers Feel the Pressure

Budget airlines, which usually have less extra cash, are feeling the heat the most. Southwest Airlines LUV +0.36% ▲ saw its stock price fall because people might stop traveling if tickets get too expensive. Since fuel is one of the biggest costs for an airline, these low-cost companies have a hard time dealing with the sudden jump in oil prices.

For anyone trying to book a vacation, the news isn’t good. Air New Zealand and United Airlines have already said that ticket prices will have to go up quick to cover their rising bills. Some flights have already doubled in price. With the Strait of Hormuz mostly closed and fuel getting harder to find, the entire travel industry is preparing for a long and difficult season.

Looking at these stocks side-by-side on the TipRanks Stock Comparison tool, we can see that they have all plunged in pre-market trading on the news.

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