By Ozan Ergenay

May 7 (Reuters) - Duty-free retailer Avolta AVOL.S felt the impact of the Iran war in the first quarter, as flights were cancelled and major air traffic hubs in the Middle East were closed because of the conflict, it said on Thursday.

The U.S.-Israeli war with Iran has sent global markets into a tailspin and significantly dampened investors' economic optimism on fears that the conflict would create an oil price shock, raising inflation.

European airlines are also preparing for a challenging spring and summer, with jet fuel prices having risen to well over $100 a barrel since the war started and concerns growing that shortages could lead to flight cancellations.

"We have seen a slowdown, some of the airports were closed for a while and there was a significant reduction in traffic in Dubai and some other operations," Gerster told Reuters.

However, he said Avolta had seen signs of a more positive momentum since April.

"Kuwait airport opened up again and there's news flow coming from Emirates Airlines which said they had reinstated 95% of their traffic over the next couple of weeks and months," Gerster said. "There is also positive news and momentum since the beginning of April."

Asked about Avolta's concerns related to the conflict, Gerster said that a fuel shortage was a potential real concern that could hit the whole sector.

"That could have an impact on the industry. Everything else, one way or the other, is all manageable," he said.