Airline stocks sold off Monday as grounded flights and a spike in crude oil prices fueled concerns about shrinking profits from higher jet fuel costs.
Shares of Delta Air Lines (DAL) dropped 5% before paring losses. American Airlines (AAL) declined as much as 6%, and United Airlines (UAL) fell as much as 7%.
Investors priced in the impact that $100-per-barrel oil will have on jet fuel costs, which account for between one-fifth to a quarter of airlines’ overall costs. On Monday, oil prices surpassed $110 per barrel for the first time since 2022, as traffic in the critical Strait of Hormuz remained at a standstill as a result of the Iran war.
The cost of jet fuel has risen by as much as $1.75 per gallon in recent weeks, meaning US major airlines could each face quarterly…
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Source finance.yahoo.com
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