American Airlines CEO Gerard Arpey said "We're all very worried about what's happening in the oil market. If the economic recovery dampens, it won't be good for traffic."
By the way, that’s true for anything people spend money on, like clothes, expensive coffee, gym memberships, etc. You get the idea.
So airline stocks are facing a double-whammy here. First, fuel costs are rising. Second, consumers have less money to travel because – well, see the first reason.
For example, some of us were thinking about getting away to Las Vegas for a few days. We checked the flights. ROTFLMAO – what? Did you see the prices for flights? And we drove to Reno instead. Harrah’s did fine. Exxon did fine. But we didn’t pay money to an airline company to get us there. We could afford it, but sometimes it’s the principle of the thing. It’s bargain shopping, right?
I know. I know. Reno is a little ghetto compared to Las Vegas. You don’t need to tell me.
Maybe there is a time to buy, when oil prices peak come down, reducing costs for airlines and also customers who can then afford more flights. In addition, there is certainly a lot of fear in airlines. Especially with holes and tears and grounded planes. (Sorry, Southwest). But, eh. Not for me.