European airline stocks tumbled as much as 9% Monday after US and Israeli military operations against Iran sent crude oil surging over 7%. Wizz Air suffered the steepest losses, with Citi Research warning that the airline's high direct exposure to Israel and low margins leave it vulnerable to both route disruptions and fuel price spikes. The brokerage rates Wizz Air as "sell/high risk."

Ryanair emerged as the most insulated carrier, benefiting from significant fuel hedges, high margins, and minimal exposure to conflict zones, earning a "buy" rating from Citi. Flynas, the Saudi Arabian low-cost carrier, faces elevated risk due to its heavy Middle East exposure and limited fuel hedging program. Citi analysts noted that while the entire sector weakened Monday, carriers with western market exposure and strong balance sheets remain preferable should the conflict persist.

Beyond airlines, J.P. Morgan predicted near-term pressure on European civil aerospace stocks while forecasting gains for European defence companies. The brokerage identified BAE Systems as the stock most likely to rally, rating it Overweight with a 2,400 pence price target. The conflict could accelerate aircraft retirements as airlines face higher fuel costs, though a large fleet of grounded GTF engines may moderate this pressure.