Company share price chart Rolls-Royce (LSE: RR) was a thing of beauty until recently. Rolls-Royce shares didn’t sell for pennies until 2022, but this year they hit a fresh all-time high of around £14.

But suddenly everything changed – a lot. The Rolls-Royce share price has fallen by 15% in just over two weeks.

The release of forceful annual results this month seems long overdue.

But with tanking stocks, could this mean that one of the UK’s best performing blue chips of delayed has once again reached a level where I should consider adding it to my portfolio?

Fingers in different doughs

I don’t think so, and there’s a good reason for that.

Rolls operates in three key business areas. In the last few years, after Russia invaded Ukraine, demand for this equipment has increased. The current war in the Middle East and the increasingly unpredictable military posture of the United States continue to put defense at the top of the political agenda of many Western countries.

Rolls also runs an energy business. In the face of rising oil prices, this also seems relevant. I expect demand to remain forceful for the foreseeable future.

This is the third of three areas of Rolls-Royce’s business that I believe explains the decline in share: civil aviation.

Wars often cause a decline in passenger demand. Higher oil prices are detrimental to airline cost structures regardless of demand.

We haven’t seen airlines speak out about this yet. However, I believe that from the closed airspace around some Middle Eastern countries to weakening consumer confidence more broadly, civil aviation will suffer greatly this year in terms of both passenger demand and costs.

When this happens, airlines tighten their belts. Aircraft engine servicing becomes less regular as aircraft log fewer flight hours, saving the financial benefits of fresh fleets. This is bad news for engine manufacturers.

The recovery in Rolls-Royce’s civil aviation business over the past few years has been a key factor driving the share price rally.

Now, with this company facing multiple threats in the current economic and geopolitical climate, this same division could drive down the stock price even further.

Doesn’t look like a bargain to me

I have long feared that a sudden, unforeseen event leading to a piercing decline in demand for civil aviation could be bad news for Rolls.

This may already be the case, and even worse, it may be made worse by skyrocketing jet fuel prices.

Even with the recent decline in Rolls-Royce share prices, they still seem very exorbitant to me. Currently, the price-to-earnings (P/E) ratio is 40. If earnings decline – a risk I see in the current environment for the reasons I described above – the potential P/E ratio could be even higher.

Given the risks, I think the price could go down from here – perhaps very far. I have no plans to buy Rolls-Royce shares.

Fortunately, there are plenty of other stocks in today’s market that still seem like possible opportunities to me.