Why Airline Stocks Plummeted on Monday

Major airline stocks like United UAL, Delta DAL, and American AAL fell by as much as 10% during Monday’s trading session; the US Global Jets ETF JETS took a big hit as well.

Surging oil prices due to Russia’s invasion of Ukraine have caused investors to flee travel-related stocks. Oil prices climbed to their highest level in over a decade yesterday, with prices continuing to spike on Tuesday as the Biden administration announced a U.S. ban on Russian oil imports. Airliners’ fuel costs are now likely to increase, and companies in the industry may be forced to lower Q1 profit and revenue expectations.

UAL, DAL & AAL, along with smaller players like JetBlue JBLU and Southwest LUV, are still trying to recover from the coronavirus pandemic. Airlines anticipated that the decline in Omicron cases, warmer weather, and the lifting of restrictions would lead to renewed demand for air travel

While shares of airline stocks rebounded Tuesday, the geopolitical uncertainty, coupled with inflation and supple chain worries, could lead to even more volatility for airlines for the time being.

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