Airline stocks have lost significant ground since the beginning of the year as investors have reduced their exposure to sectors with limited near-term prospects due to the persistent economic headwinds and a potential recession. Despite recovering travel demand, high inflation, surging fuel costs, and staffing issues have weighed heavily on the industry.
The Russia-Ukraine conflict and the corresponding spike in oil prices have affected the industry since fuel accounts for at least 30% of an airline’s total costs. The aviation fuel cost per gallon had hit its all-time high, reflecting a 96% year-over-year cost per gallon increase. Higher costs have put pressure on the bottom line of most airline service providers this year.
