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Global airlines stocks gave back some of the gains they picked up over the last few session after the Kremlin denied that substantial progress had been made with diplomatic talks with Ukraine. That headline promoted a notable turn higher in oil prices.
Decliners include Azul (AZUL -4.8%), Gol Linhas (GOL -4.8%), Copa Holdings (CPA -4.7%), Volaris (VLRS -4.4%), Ryanair (RYAAY -2.4%), China Southern Airlines (ZNH -2.6%), Deutsche Lufthansa (OTCQX:DLAKF -3.0%), easyJet (OTCQX:ESYJY -6.4%), International Consolidated Airlines Group, S.A (OTCPK:ICAGY -3.9%) and Japan Airlines (OTCPK:JAPSY -1.8%).
U.S. airlines are also having a down day, led by Spirit Airlines (NYSE:SAVE -3.9%) and JetBlue Airways (JBLU -2.9%).
UBS checked in on the airline sector with an eye on higher fuel costs. Analyst Myles Walton noted that lower oil prices in recent years haven't incentivized airlines to hedge and that the industry largely shifted away from the practice, including the big three of American Airlines Group (NASDAQ:AAL -2.0%), Delta Air Lines (NYSE:DAL -2.9%) and United Airlines (UAL). However, Alaska Air (ALK -2.1%) and Southwest Airlines (NYSE:LUV -2.1%) are the two exceptions with ~50% and ~65% of 2022 fuel consumption hedged, respectively. Walton noted that Delta doesn't hedge but they own the Monroe refinery, which is said to act as a modest natural hedge to higher jet fuel prices
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