Asian airline stocks experienced a sharp decline on Monday, reflecting a broader market reaction to the U.S. and Israel’s decision to conduct strikes against Iran over the weekend.
The escalating conflict, particularly Iran’s retaliatory missile launches into neighboring countries such as the United Arab Emirates, compelled airlines to cancel hundreds of flights destined for the Middle East. Operations were suspended at three major airports—Doha in Qatar, and Dubai and Abu Dhabi in the United Arab Emirates—in response to the hostilities. (The airports in Dubai and Abu Dhabi also sustained damage from the strikes.)
Shares in declined by 4.5% as of 11:00pm Eastern time. Australia’s Qantas and Hong Kong’s Cathay Pacific saw drops of 5.4% and 2.8% respectively. Japan Airlines, one of the nation’s two primary carriers, also fell by 5.6%.
In a statement issued March 1, Singapore Airlines indicated it , which operate the Singapore-Dubai route. Its budget subsidiary, Scoot, also temporarily halted flights between Singapore and the Saudi Arabian city of Jeddah.
Overall, Asian markets slumped. Hong Kong’s Hang Seng Index was down by 1.6%, while Singapore’s Straits Times Index dropped by 1.8%. Japan’s Nikkei 225 index fell by 1.4%. (South Korea’s markets were closed today.)
Conversely, Asia-Pacific defense stocks rose, aligning with a long-term industry boom amidst a global surge in defense spending. (Global military spending reached a record high of $2.6 trillion in 2025, according to the International Institute for Strategic Studies.)
Japan’s Heavy Industries rose by 3.6%, while Singapore’s ST Engineering was up by 3.4%.
Some energy companies also saw gains due to expectations that the Iran conflict could impact oil shipments from the Middle East. Australia’s Woodside Energy increased by 5.4%, while Hibiscus Petroleum—Malaysia’s first listed independent oil and gas exploration company and ranked No. 410 on the Southeast Asia 500—jumped by 13.1%.
Oil prices climbed by more than 10%, with Brent Crude reaching as high as $82.37 per barrel in early trade—its highest point since last January. West Texas Intermediate crude, the U.S.’ oil benchmark, also rose 6.95% to its highest level since last June, hitting $75.33 per barrel.