IndiGo, SpiceJet, other tourism stocks in focus after US, Israel attack on Iran leads to airspace closure

Synopsis

Airspace closures across the Middle East following US and Israeli strikes on Iran have disrupted flights and triggered volatility in aviation and travel stocks such as IndiGo and SpiceJet. Airlines face rising costs and demand risks, while widespread flight cancellations and route disruptions weigh on near-term sector outlook.

Shares of major airlines such as InterGlobe Aviation, the parent of IndiGo, and SpiceJet, as well as online travel firms like Ixigo and Easy Trip Planners, could see heightened volatility on Monday after US and Israeli attacks on Iran led to airspace closures across major Middle Eastern countries, disrupting flight operations and travel routes.

IndiGo, India’s largest airline by market share, cancelled all flights to and from the Middle East. In a travel advisory issued to passengers, it said the move has been taken as a precautionary step. "In an endeavour to provide support to our customers, we are extending full flexibility and waivers for travel to/from the Middle East and select international sectors until 7 March 2026, applicable to bookings made on or before 28 February 2026. Customers may opt for a full refund or reschedule at no additional cost.”

Key transit hubs such as Dubai, the world’s busiest international airport hub, along with Abu Dhabi in the United Arab Emirates and Doha in Qatar, were either shut or operating under severe restrictions, as much of the region’s airspace remained closed following US and Israeli strikes on Iran.

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Escalating tensions pose a clear negative for travel and tourism stocks. Flight disruptions, rerouting and cancellations can raise operating costs for airlines, particularly fuel and crew expenses. At the same time, heightened geopolitical uncertainty could dampen travel demand, triggering booking cancellations and slower new reservations, which can pressure revenues and near-term earnings visibility across the sector.

Dubai International Airport sustained damage during Iran’s attacks, while airports in Abu Dhabi and Kuwait were also struck. Thousands of flights across the Middle East have been disrupted, according to data from flight-tracking platform FlightAware.

At least eight countries shut their skies as the conflict erupted on Saturday. Iran, Israel, Iraq, Jordan, Qatar, Bahrain, Kuwait and the United Arab Emirates all declared their airspace closed. Syria additionally said it would close part of its airspace in the south along the border with Israel.

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