MarketsJun 24, 2026
Airline Stocks Soar as Crude Oil Plummets
Rhea Lobo
The S&P 500 Passenger Airlines index hit to an all-time high on June 24 as crude oil fell to its lowest level since before the Iran conflict began.
Individual carriers moved on the news. American Airlines. Alaska Air and United Airlines all rose sharply. JetBlue, Delta, and Southwest also climbed.
As more tankers passed through the Strait of Hormuz, Brent crude fell below $74 a barrel. WTI futures also dropped below $70 in early trading that day.
The S&P Passenger Airlines index is up nearly 13% since June 12, the day the US and Iran announced a peace agreement. The broader S&P 500 has fallen 0.5% in that same stretch.
Jet fuel is the sharpest lever on airline profitability. Before US-Israeli strikes on Iran in February, jet fuel averaged roughly $85 to $90 a barrel.
It peaked above $170 and was still averaging $119.17 in the week ending June 19, according to the International Air Transport Association.
UBS analyst Atul Maheswari said airline stocks are benefiting from cheaper fuel and continued strength in passenger demand. The bank sees potential for third-quarter earnings per share to outperform Wall Street estimates if fuel prices keep moderating.
Analysts note that carriers with smaller fleets and fewer premium seats stand to gain more, because their margins are more sensitive to fuel-price swings.
Passengers shouldn't expect cheaper tickets soon. Capacity remains tight, and airlines are unlikely to pass fuel savings on to travelers in the near term.
Not every oil decline is equal for airline stocks, and the distinction matters. Analysis of nearly 30 years of data shows that demand-driven oil crashes, like those following the September 11 attacks or the 2008 financial crisis, delivered weak or negative returns for airline stocks even as fuel got cheaper, because travel demand collapsed alongside prices.
Supply-driven crashes have historically been the most favorable for airlines. After Saudi Arabia flooded markets in 2014, airline stocks returned 52% over the next 12 months.
There are exceptions. During the 2020 pandemic oil crash, airlines later returned 132% as investors began pricing in a recovery in travel demand.
The 2026 episode fits the supply-shock pattern. An external geopolitical disruption sent oil to $146 a barrel at its peak. Now that disruption is resolving, and passenger demand has remained intact throughout. Whether the strongest returns still lie ahead depends on how fully fuel costs normalize from here.
