Oil prices are down sharply Friday morning following news that OPEC will leave production quotas unchanged, with oil futures down nearly 6.5 percent. One of the sectors that will benefit directly from lower oil prices will be the airlines, as fuel accounts for 25 to 30 percent of the overall operating expenses for the major airlines.
Below are a few major U.S airlines and the pre-market moves:
- American Airlines Group Inc AAL up 4.8 percent
- Delta Air Lines, Inc. DAL up 4.5 percent
- United Continental Holdings Inc UAL up 5.1 percent
Most airlines hedge their fuel cost to some degree, so the effect of lower fuel costs will be somewhat offset.
Overseas, foreign airline stocks showed big gains. Air China rose 6.44 percent, Japan Airlines was up nearly 5.3 percent and Qantas gained almost 7 percent.
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