The main airlines and large aeronautical groups of the Old Continent have concluded this Monday's stock market session in the red on their respective exchanges. Among the affected companies are IAG, Lufthansa, and Air France-KLM, in an adverse environment marked by the war in the Middle East, which could cut the European sector's profit by 26% by 2026.
This is according to the recent report by the International Air Transport Association (IATA), which calculates this drop due to operational disruptions and the increase in fuel costs. The projected profit for continental European airlines is lowered from the initially estimated 13 billion dollars (11.262 billion euros) to the current 9.3 billion dollars (8.056.7 billion euros).
In the global market as a whole, across all regions, the airline industry will see its profits halved compared to previous projections, falling to 23 billion dollars (19.979 billion euros).
In this context, IAG fell 1.70% this Monday on the Ibex 35, to 4.787 euros per share, making it the fourth worst performer in the selective index, while another tourism-related company, Amadeus, registered an even greater decline of 2.12%.
Regarding the stock market performance of other major European groups, Air France-KLM, Lufthansa Group, and Wizz Air saw drops of over 2%, while Ryanair ended practically flat with -0.59%.
70% FUEL COVERAGE TO MITIGATE PRESSURE
The IATA report emphasizes that Europe is "highly" dependent on imports of aviation fuel from the Persian Gulf.
However, this pressure is cushioned by hedging contracts entered into before the crisis erupted, which covered 70% of their fuel needs. Even so, the organization warns that "the increase in costs will be felt as these coverages expire."
Regarding air traffic, the continent has registered some growth thanks to the reinforcement of direct connectivity between Europe and Asia, which has replaced part of the transit that previously passed through Gulf airports. In parallel, some areas remain conditioned by airspace restrictions over Russia.