These airline shares are winning on oil's slide

A Southwest Airlines plane getting fuel at Oakland International Airport.
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Southwest Airlines appears to be one of the biggest winners of oil's slide.

Southwest gained more than 2 percent on Monday after Goldman Sachs upgraded the stock to "buy" from "neutral" and said it expects the company to outperform its peers.

Southwest has gained about 124 percent this year, making it the best performer year-to-date.

It's also one of two S&P 500 companies to see triple digit gains this year, thanks to strong travel demand and falling oil prices.

Shares of United Continental and JetBlue, which have gained 75 percent and 87 percent, over the past year, were also up about 2 percent.

Meanwhile, shares of American Airlines, Spirit and Delta declined along with the the Dow Jones Transportation Average, SPDR S&P Transportation ETF and the NYSE Arca Airline indexes.

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U.S. oil prices settled at their lowest lowest level since July 2009 on Monday. The plunge in oil has reduced airliner's fuel costs by about a third, according to Bob McAdoo, an analyst at Imperial Capital, but he doesn't expect those saving to trickle down to consumers.

Oil's airline impact
Oil's airline impact

"In times past that happened, but that was because airlines had empty seats and wanted to fill them. That's not the case today," McAdoo said. "In today's world planes are basically full … so there's really no incentive to do for airlines to lower prices."

McAdoo said load factors, on average, are running well into the 80s, because airlines reduced capacity and stopped flying planes that were money losers.

In addition, load factors, the number of passengers getting on airplanes, are increasing to and interest rates are still at all-time lows, which "helps airline tremendously," said Hue Jonson, chairman of Hugh Johnson Advisors.

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"There's no way to overstate the benefits of the decline in oil prices for airlines," Johnson said. "But that can reverse itself very quickly and no one can predict the timing... Oil prices can turn on a dime."

Johnson said doesn't own airline stocks because of their "extremely volatile nature," but noted that Southwest seemed to be the obvious winner of the bunch.