New Airline Risks: Global Strife & High Oil (LUV, AMR, UAL, DAL, LCC, FAA, RYAAY)

If there is one industry which reacts immediately to higher oil prices and to global unrest, it is the airline sector.  These are technically not new risks but these two issues are hitting the airline carriers hard this Tuesday.  Fewer people want to fly when tensions are high and the price of oil usually rises faster than what can be passed down to the retail passenger via fuel surcharges. The current economy will lend high profits to the airline sector, but that can disappear or erode quickly if cancellations rise and if fuel prices rise too much.  What was a surprising $7.00 per barrel oil spike is only outweighed by the fact that some might have expected a one-day reaction in airlines to be even worse.

Southwest Airlines Co. (NYSE: LUV) was down 5.5% at $11.88 late in the session on more than double normal trading of over 12.3 million shares.

AMR Corporation (NYSE: AMR) was down over 6% at $6.99 on about 250% of normal volume with over 25 million shares traded.

United Continental Holdings (NYSE: UAL) was down 9.6% at $24.33 on nearly triple volume of 13.3 million shares.

Delta Air Lines Inc. (NYSE: DAL) was down 7.2% on about 250% of normal volume with more than 31.8 million shares late in the day.

US Airways Group, Inc. (NYSE: LCC) was down 6.15% at $9.12 on more than triple volume of over 18 million shares late in the session.

JetBlue Airways Corporation (NASDAQ: JBLU) was down 6.5% at $5.70 on near-double volume with more than 9.1 million shares having traded late in the session.

Guggenheim Airline (NYSE: FAA) was down 5.4% at $37.05 right before the close on about quadruple normal volume of over 83,000 shares.

One standout shocking drop, due to how small of a drop was seen, was Ryanair Holdings plc (NASDAQ: RYAAY) with shares down only 2.3% at $29.51 late in the trading day.  Its volume was not even above 100% at 395,000 with about 20 minutes to close.

JON C. OGG