United Airlines shares dropped nearly 7% on Friday, marking their steepest decline in over a year, as soaring oil prices and broader market uncertainty weighed on airline stocks. The sector saw widespread losses, with several major carriers posting significant declines.
- United Airlines (UAL) fell 6.8% on Friday, its worst single-day drop since April 2025.
- Brent crude oil futures rose to $98.30 per barrel, up 4.3% in one day.
- Delta (DAL), American (AAL), and Alaska Air (ALK) all declined between 4.6% and 5.2%.
- Airline fuel costs represent 20%–25% of operating expenses, making them highly sensitive to oil spikes.
- The S&P 500 airline sector posted a 4.1% average loss, the worst among all industry groups.
- Market volatility index (VIX) climbed above 18, reflecting heightened investor unease.
United Airlines (UAL) led losses in the S&P 500 on Friday, slipping 6.8% to close at $118.25, its worst daily performance since April 2025. The decline pushed the stock to its lowest level since late 2024, reflecting investor concerns over the rising cost of crude oil and its impact on airline operating margins. Oil futures surged past $98 per barrel, with Brent crude rising 4.3% on the day, driven by geopolitical tensions and supply concerns in the Middle East. The broader airline sector followed suit, with Delta Air Lines (DAL) falling 5.2%, American Airlines (AAL) dropping 4.9%, and Alaska Air Group (ALK) down 4.6%. These declines brought the sector’s average performance to -4.1%, making it the weakest-performing group in the S&P 500. The sharp drop underscores the vulnerability of airlines to fuel cost volatility, given that aviation fuel typically accounts for 20% to 25% of total operating expenses. Market sentiment remained fragile as Treasury yields climbed and the Cboe Volatility Index (VIX) rose above 18, signaling increased risk aversion. Analysts noted that while airlines have hedged some fuel exposure, the rapid spike in crude prices could erode recent profitability gains. With fuel costs now approaching levels not seen since mid-2023, companies may face pressure to raise fares or scale back capacity, potentially affecting travel demand in the near term.