Shares in International Consolidated Airlines Group SA (LSE:IAG), the owner of British Airways and Iberia, fell 10.5% in early trading on Monday as investors reacted to escalating fears of a global trade war.
The drop follows US President Donald Trump’s sweeping tariffs on imports, which have raised the risk of a broader economic slowdown.
Airlines are particularly vulnerable to rising trade tensions. A global downturn would likely lead to weaker demand for international travel, especially from business passengers - a key revenue source for IAG.
At the same time, uncertainty tends to disrupt international supply chains, adding pressure to margins.
For IAG, which operates a network of transatlantic and European routes, any hit to global mobility or confidence could weigh heavily on future bookings and profitability.
There was one bright spot for the carrier on a horrendous day for shareholders. Oil prices, a key determinant of jet fuel costs, fell to four-year lows.
In the opening exchanges, IAG shares were off 24.9p at 213.15p.