By Callum Keown

Airline stocks have been crushed since the Iran war began but the sector is starting to show signs of a recovery. However, the shares remain entirely at the mercy of oil prices.

The sector benefited from the sharp swing lower in crude prices Monday as the stocks rebounded to close higher for the day. Brent crude futures swung from highs of close to $120 a barrel to lows of $83.66 Monday -- they were trading at around $91 early Tuesday, a 8% drop from its close in the previous session.

The U.S. Global JETS exchange-traded fund, which tracks the performance of airlines, climbed 1.7% Monday but remains 9% down since the Iran war began. United Airlines, Delta Air Lines and American Airlines all climbed between 2% and 3% -- they were all up around 1% ahead of the open Tuesday.

Jet fuel prices have climbed as high as $4.19 a gallon in Los Angeles and $3.92 a gallon in New York Harbor, according to OPIS, an energy data and analytics company that shares the same owner with Barron's.

Only Delta, United, and Southwest Airlines can "generate meagre profits" with fuel at $4 a gallon or more, UBS analyst Atul Maheswari wrote in a note Monday. "None of the other airlines will make money if fuel sustains at these levels with some airlines likely to be deep in the red, " he added.

United, Southwest and American are down more than 10% since the conflict started, while Delta is 8% lower. JetBlue Airways has been one of the worst affected, slumping 18% this month, through Monday's close. It was falling 0.2% in Tuesday's premarket.

Low-cost carriers are likely to find it harder to pass on rising costs to consumers through higher airfares as it threatens their business model. JetBlue was also dealing with operational problems early Tuesday -- the Federal Aviation Administration briefly grounded all the carrier's flights following a request from the airline.

European airlines were also climbing Tuesday -- catching up on the comeback late Monday. British Airways owner International Consolidated Airlines Group $(IAG)$ rose 5%, while EasyJet and Ryanair were up around 3%.

European carriers tend to hedge their fuel consumption, while the major U.S. airlines decided to largely abandon the practice in the 2010s. Southwest dropped its hedging policy last year -- the last of the big carriers.

That means for now, the stocks look set to move inversely to oil prices.

Write to Callum Keown at callum.keown@dowjones.com

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March 10, 2026 07:56 ET (11:56 GMT)

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