Flydubai Incident Boosts Israeli Airline Stocks Amid Terror Attack Fears

An incident aboard a Flydubai flight has led to a significant surge in the stock prices of Israeli airlines. On Wednesday, September 30, shares of El Al rose by 8% and Israir by 9% on the Tel Aviv Stock Exchange. This increased demand for Israeli carriers, known for their high security standards, stems from suspicions that the incident on a flight from Dubai to Tel Aviv, carrying 174 passengers including 27 children, was a deliberate terror attempt. Israeli security services suspect the co-pilot, an Omani national, attempted to seize control of the aircraft to cause a crash. Security circles in Israel increasingly believe the event was not a mere altercation between pilots but a planned, large-scale terrorist act. This concern has fueled interest in El Al and Israir, whose flights are exclusively piloted by Israeli aviators, many with prior service in the Israeli Air Force. Both companies utilize advanced security systems, partly funded by the state. Flydubai has become popular with Israeli tourists traveling to the UAE or transiting through Dubai, partly as an alternative to flights via Istanbul. Flydubai accounts for about 3.5% of Ben Gurion Airport's passenger traffic, compared to El Al's 44% and Israir's 13.5%. The incident is expected to severely damage Flydubai's market position, potentially long-term and beyond the Israeli market. However, Israeli airlines do not fly to the UAE due to security concerns and would not benefit from a suspension of Flydubai's flights to Israel pending investigation, a move demanded by Transportation Minister Miri Regev. El Al's stock has increased by 15.8% since the start of 2026 and 422% over the past three years. Israir's stock has fallen 13% since January 1, 2026, and lost 10% of its value over the last three years.