Airline Stocks Top Covid High After Oil Price Collapse - American Airlines Group (NASDAQ:AAL), Tripadviso

Airline stocks have moved above pre-pandemic highs after a collapse in oil prices reshaped costs and investor expectations. The article says a fund tied to airline performance rose above its pre-Covid levels for the first time, closing at $33.28 last Friday, after a two-month gain of 31%—its sharpest run since vaccines began to roll out. It links the turnaround to events in the Strait of Hormuz: once the waterway reopened, traffic reportedly recovered to about 70% of pre-war levels, while crude fell to around $70 per barrel, down more than $50 from its March peak. The piece argues that jet fuel is the largest variable cost for most carriers, so declines in crude translate quickly into margin expansion. Bank of America Securities cited Brent down 28% over the prior month, while airline equities rose 26% across the group, describing it as a “perfect storm” of low capacity, falling fuel, and strong demand. It also notes ticket pricing and inflation metrics rose year over year, while valuation remains below long-run averages, with American trading about 40% under its historical P/E.