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Market Update

Airline Stocks Stage a Rally as Oil Prices Fall

Shares of the carriers often rise when the price of oil—their most volatile input—falls in price.

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Shares of domestic carriers rose with Delta Air Lines (DAL), United Airlines (UAL), and American Airlines (AAL) each rising by 8% or more in trading on March 15.

The move in shares came after oil prices fell on concerns about demand following a resurgence in coronavirus cases led to a lockdown of two cities in China by authorities. Oil and airline stock prices share an inverse relationship, with the value of carriers rising as the commodity's price falls. The price of oil is an airlines most volatile input, according to Morningstar analyst Burkett Huey. 

Jakir Hossain does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.