Turkey’s aviation stocks fell after coordinated terror attacks at one of Europe’s busiest airports threatened to deal another blow to the nation’s struggling tourism industry.

Turkish Airlines and airport operator TAV Havalimanlari Holding AS were the biggest drag on the Borsa Istanbul 100 Index after three suicide bombers killed at least 40 people and wounded more than 200 at Ataturk Airport, Turkey’s main international hub. Prime Minister Binali Yildirim said early investigations indicated Islamic State was likely to be responsible. The lira tracked gains across emerging currencies and rose 0.4 percent to 2.8937 per dollar.

The attacks are the latest in a series of blows to the nation’s tourism industry, which last month saw the biggest slump in visitor numbers on record. Security in Turkey has deteriorated amid the spillover from Syria’s civil war and an escalating conflict with separatist Kurdish militants.

“Imagine one of your factories which makes up about half of your total output is blown up; that is how serious yesterday’s attack is for Turkish aviation companies” Burak Isyar, an analyst at Burgan Yatirim Menkul Degerler in Istanbul, said by phone. “Given the severity of this situation, aviation stocks are likely to plunge further in the coming days. This is a worse scenario than the worst scenario people imagined.”

Turkey’s aviation industry relies heavily on Istanbul where a new airport is currently under construction to replace the one attacked yesterday in 2018. Turkish Airlines’s long-term plans include turning the city into a global transit hub and more than 50 percent of TAV Holding revenue comes from Ataturk Airport.

Turkish Airlines, which suspended all flights until 8 a.m. local time, retreated 2.2 percent as of 11:49 a.m. in Istanbul as traders exchanged 45 million shares, more than twice the 20-day average. TAV sank 5.6 percent and the Borsa 100 index declined 0.2 percent.

Ataturk Airport made about 60 percent of TAV Holding’s total passengers in the first quarter, according to an investor presentation on the company’s website. Turkish Airlines uses Istanbul as a hub to the Americas, Europe and Asia and relies on transit passengers to generate about 60 percent of revenue.

Russian Tourists

The incident “is a truly unfortunate development for the country’s tourism and aviation sectors ahead of next week’s religious holiday and the peak summer season,” Selim Kunter, an analyst at Deniz Investment, a brokerage in Istanbul, wrote in an e-mailed note. “It also wipes out the glimmer of hope for a recovery in tourism inflow following the thaw in Russia-Turkey relations.”

The Kremlin on Monday said President Recep Tayyip Erdogan apologized for the downing of one of its warplanes last year, fueling speculation that a retaliatory ban imposed on charter flights that hurt Turkey’s tourism industry would be lifted. A 92 percent slump in Russian holidaymakers was the biggest contributor to a record 35 percent decline in the number of tourists visiting Turkey in May.

Another Turkish carrier, Pegasus Hava Tasimaciligi, declined 1.3 percent to 13.73 liras, while ground handling company Celebi Hava Servisi fell 3 percent. The Borsa Istanbul Transportation Index dropped 2.1 percent.

©2016 Bloomberg L.P.

This article was written by Tugce Ozsoy and Constantine Courcoulas from Bloomberg and was legally licensed through the NewsCred publisher network.

Photo Credit: A passenger sits outside Istanbul's Ataturk airport, early Wednesday, June 29, 2016 following her evacuation after a blast. Emrah Gurel / Associated Press