Airline stocks drop as oil soars
Stocks for most major carriers slump as oil jumps by $5 a barrel; Southwest still protected by hedging.
NEW YORK (CNNMoney.com) -- Most of the major airline stocks took a dive during Thursday afternoon trading, as the price of oil - the industry's greatest obstacle - surged more than $5.
The Amex Airline Index (XAL) slipped more than 4%, matching the decline of the leading airline company AMR Corp., (AMR, Fortune 500) parent of American Airlines.
Most of the major carriers, including Delta (DAL, Fortune 500), UAL Corp.'s (UAUA, Fortune 500) United Airlines, Continental Airlines (CAL, Fortune 500), Northwest Airlines (NWA, Fortune 500) and AirTran Airways (AAI) posted losses of at least 5%. US Airways (LCC, Fortune 500) was the worst performer, with a 9% drop.
Meanwhile, oil prices jumped $5.19 to $120.75 a barrel. The falling dollar and renewed concern over the credit crunch has pushed investors towards commodities.
The Air Transport Association, the industry trade group, projects that the industry's fuel costs will jump nearly 50% this year to $61.2 billion, from $41.2 billion in 2007.
But Southwest Airlines (LCC, Fortune 500) made slight gains in afternoon trading. The carrier has insulated itself from rising costs by successfully hedging its fuel purchases. 
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