MW United's stock and other airline shares get a reality check from rising oil prices, market jitters

By CLAUDIA ASSIS

United Airlines' stock leads S&P 500 decliners

United Airlines' stock was on track for its worst percentage decline since April.

United Airlines' stock was leading S&P 500 index decliners on Friday and heading for its worst drop in 10 months, with other airline stocks also seeing steep declines amid rising oil futures prices and increased market jitters.

United shares $(UAL)$ were on pace for their largest one-day percentage decline since April 10, when they fell 11%. Shares of Delta Air Lines $(DAL)$ and American Airlines $(AAL)$ were down about 6% each.

Shares of Southwest Airlines $(LUV)$ were down more than 3% even as analysts at Cowen raised their rating on the stock to buy on Friday and praised the industry's backdrop. Such ratings changes usually provide a boost for a company's shares.

Oil futures jumped on Friday after nuclear talks between the U.S. and Iran in Geneva ended with no concrete agreements. Negotiations are set to resume next week.

Many airlines shield themselves from volatility in the price of fuel, which makes up a large part of their operational costs, by hedging it, usually using financial derivatives to try to spread their risk. But there has been a clear negative correlation between oil futures prices and airline stocks in recent years.

Signs that inflation may persist and broader fears about artificial intelligence and tech stocks were also at play for U.S. equities, with some fearing that March will be another tumultuous month for the market.

U.S. airlines enjoy broad-based demand and capacity is "rational," the Cowen analysts said in their note about Southwest. The "rising industry tide" bodes well for the company, they said.

The airline for years stuck with a one-size-fits-all approach that fell out of sync with competitors, which dove deeper into tiered fares and charging for different services as a way to drum up more profits.

Amid pressure from activist investors, Southwest announced sweeping changes a couple of years ago, including the end of its hallmark policies of open seating and no fees for checked baggage. It started charging baggage fees earlier this year, while extra-legroom and assigned-seating options went live in January.

-CLAUDIA ASSIS

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February 27, 2026 14:03 ET (19:03 GMT)

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