Airlines emerge from profit-killing oil slick

In early July, U.S. airline stocks were so battered you could buy one share each of five big airlines for less than the cost of checking a single bag.

With oil prices then approaching $150 a barrel and air travel demand sinking, Wall Street’s view was that most of the USA’s airlines were destined for bankruptcy reorganization


Now the summer season’s end is approaching with an eight-day Labor Day travel period for which the airlines’ trade association forecasts a sobering 6% drop in demand from a year ago. Yet conventional wisdom about airlines’ survivability is changing rapidly, thanks in large measure to a $30-plus drop in the price of a barrel of oil.

Don’t get too excited yet