** Shares in airlines were lower on Thursday as rising oil futures suggested higher fuel prices and S&P 1500 passenger airlines index .SPCOMALI was down 4.8%, which would put it on track for its biggest one-day percentage drop since April last year

** U.S. crude oil futures CLc1 up 2.3% on concerns about a potential U.S.-Iran conflict. President Donald Trump said on Thursday that U.S. had to make a meaningful deal with Iran, citing good talks with the Middle Eastern country or "otherwise bad things happen," at his first Board of Peace meeting. Meanwhile, Iran conducted navy drills this week in the Hormuz Strait and was planning a joint naval exercise with Russia.

** The Dow Jones Transportation Average Index .DJT was down 1.6% and most of its top percentage losers were airlines

** Alaska Air ALK.N was down 6% followed by losses of 5% or more in shares of United Airlines UAL.O Delta Air DAL.N and American Airlines AAL.O while Southwest Airlines LUV.N was down 4.6%

** Also in the mix for airline stocks recently is concern about the potential impact of a partial government shutdown and some consumer caution around leisure spending

** NYSE Arca Airline Index .XAL down 4% on Thursday after falling 0.3% on Wednesday

(Reporting by Sinead Carew, Rajesh Kumar Singh)

((sinead.carew@thomsonreuters.com))