4 Airline Stocks to Buy as Oil Prices Remain Elevated

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However, the key barrier to the industry’s recovery is the rallying oil prices, as fuel prices negatively correlate with the profitability of airline operators. Oil prices hit multi-year highs on October 25, with U.S West Texas Intermediate (WTI) crude futures reaching their highest level since October 2014, while Brent hit its three-year high. Fuel costs constitute 19% of total expenditure for airlines worldwide in 2021.

Though oil prices remain elevated, we think Southwest Airlines Co. (LUV), Delta Air Lines, Inc. (DAL), United Airlines Holdings, Inc. (NASDAQ:UAL), and American Airlines Group Inc. (AAL) could deliver solid returns considering their fundamental strength and the expected increase in travel ahead of the holiday season.

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