United Continental (NYSE:UAL), Delta (NYSE:DAL), AMR (NYSE:AMR) Fall on Higher Oil Prices

U.S. airline stocks tumbled on Tuesday, smacked by a spike in oil prices amid unrest in the Middle East.

"The airlines are having a tough day of it. And it's to be expected, given everything happening out there," said Helane Becker, an airline analyst with Dahlman Rose & Co.

The main drag on airline stocks was an oil rally, which boosts the prices of jet fuel, a top cost for airlines. U.S. crude oil was up $4 to $93.71 per barrel on concerns that the revolt in Libya could spread to other major oil producers.

According to the Air Transport Association, an airline trade group, every penny-per-gallon-per-year increase in the price of jet fuel means $170 million to $180 million in additional fuel expenses for the industry.

The Arca airline index (AMEX:XAL) was down 3.97 percent in morning trade. United Continental Holdings (NYSE:UAL) was off 6.5 percent to $25.17, Delta Air Lines (NYSE:DAL) fell 7 percent to $10.69, and AMR Corp (NYSE:AMR), parent of American Airlines, dropped 5.6 percent to $7.02, all on the New York Stock Exchange.

Rest of Story...