NEW YORK -- Shares of major U.S. airlines climbed Wednesday as the price of oil plunged and analysts said less flying and lower costs could boost earnings.
Benchmark oil lost more than 3 percent Wednesday on more evidence of slower growth in China, the world's second-largest oil consumer behind the U.S. Airline stocks tend to trade inversely to the price of oil because fuel is one of the airlines' largest expenses.
Shares of US Airways Group Inc. led the sector's gains Wednesday. The airline's costs came in lower than expected for the third quarter, including a slightly lower price for fuel. Because of lower costs, JPMorgan analyst Jamie Baker believes that US Airways will report a bigger-than-expected profit for the quarter. The stock gained more than 8 percent.
Sterne Agee analyst Jeff Kauffman said lower-than-expected costs should help airlines across the board, especially with demand expected to bump up heading into the critical holiday travel season.
For Delta Air Lines Inc., Wolfe Trahan analyst Hunter Keay said he's encouraged by the company's stabilizing revenue, and he suggested the stock may be headed for a rebound. Delta shares gained about 4 percent.
United Continental Holdings Inc., the world's largest airline company, rose 6 percent.