Why Airline Stocks Are Soaring Higher Today
As noted last week, when oil zigs, airline stocks tend to zag. On Wednesday, oil prices pulled back from 14-year highs and then, sure enough, airlines got a lift. Shares of United Airlines Holdings (NASDAQ: UAL) led the way, up as much as 13%, while shares of American Airlines Group (NASDAQ: AAL), Delta Air Lines (NYSE: DAL), Southwest Airlines (NYSE: LUV), JetBlue Airways (NASDAQ: JBLU), and Spirit Airlines (NYSE: SAVE) all traded up at least 5%.
The relationship between airlines and oil is pretty straightforward. Jet fuel accounts for as much as 30% of the operating costs of an airline, and when fuel spikes higher it inevitably hits the airline's bottom line. The crisis in Ukraine has led to oil prices soaring higher, and airlines as a result have been losing altitude of late.
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Source Fool.com
