The major European carriers saw their share prices decline after the region’s busiest airport had to temporarily close on Friday.
ADVERTISEMENTAirline shares slipped on Friday after the sudden closure of London’s Heathrow Airport due to a major power outage.
Hundreds of thousands of passengers had their flights cancelled after a fire knocked out power at an electrical station, also destroying Heathrow’s back-up power supply. The blaze, located about 3km from the airport, was brought under control about seven hours after it erupted.
“We expect significant disruption over the coming days, and passengers should not travel to the airport under any circumstances until the airport reopens,” Heathrow said in a statement.
Heathrow is one of the world’s busiest airports, hosting 200,000 passengers a day on average. Flight tracking service FlightRadar 24 said that at least 1,350 flights to and from the airport were affected.
Airlines’ shares in landing mode
One of the biggest airlines affected is British Airways, which confirmed in a statement that the fire is having a “significant” impact on operations. Its owner, International Consolidated Airlines Group S.A. (IAG), saw its shares drop 3% in the morning and 1.5% early afternoon in London.
Commenting on IAG’s share price, Russ Mould, investment director at AJ Bell, said to Euronews Business: “Investors clearly believe that the situation at Heathrow can be rectified relatively quickly.”
A BA spokesperson told Euronews Business that the company “had to cancel all short-haul flights that were due to operate to and from the airport today”. They added that BA was reviewing its long-haul schedule as well as the implications for “future flights planned for tomorrow and beyond”.
The company is offering rebooking or a full refund to its customers.
Jefferies highlighted that British Airways operates extensively from Heathrow, where weekend flights make up 0.4% of the group’s 2025 available seat kilometres (ASKs), a measure of passenger carrying capacity.
“Compensation is likely to be the largest immediate cost,” said the investment bank, adding that this could wipe out 1-3% of the group’s 2025 EBIT. The company’s profit is likely to be further impacted by the additional costs of crew and pilot relocation, with the disruption set to last for several days.
Other airlines’ share prices were also affected. KLM-Air France slipped by 1.5%, German Lufthansa lost 1.7%, and Easyjet also lost about 1% by 2pm CET.
Other European airlines that don’t operate at Heathrow were also dragged down by the negative sentiment. Wizz Air shares declined 1.4% and Ryanair’s shares were also down by 0.8%.
The sell-off is part of a broader trend showing increasing concerns from investors about the future of airlines.
“IAG’s shares are down by a quarter from their February five-year peak,” said Mould, adding that the trend is down to “wider worries about consumer and business traffic volumes at a time when trade and tariff talk remains a source of wider uncertainty”.
The trend extended to other sectors, too. German leisure and tourism company TUI, which owns five airlines including one that serves the British market, slid 1.8%. Intercontinental Hotels Group had one of the biggest losses today in London, dipping by 3.7%.
