Oil prices rise, airline stocks weaken, Korean Air 1,000won(3.55%) lower
9As geopolitical tensions in the Middle East rose again in the morning, international oil prices increased and domestic airline stocks weakened in early trading. As of 10 a.m. 58 minutes, Korean Air was 1,000won(3.55%) lower than the previous day.
9As geopolitical tensions in the Middle East resurged in the morning, international oil prices rose again, and domestic airline stocks weakened in early trading. As of 10 a.m. 58 minutes, Korean Air was 1,000won(3.55%) lower than the previous day.
Asiana Airlines and some low-cost carriers also weakened. Airline-related stocks fell relatively sharply in morning trading.
The session showed that conflict in the Middle East put upward pressure on international oil prices. The impact of oil prices is considered an important variable in airlines' operating costs.
Airlines are sensitive to fluctuations in oil prices because fuel costs account for a significant share of their cost structure. In the past, airline stock prices have also responded quickly when oil prices surged.
For the time being, investors need to pay attention to oil price trends and disclosures on each airline’s fuel-cost hedges (contracts that fix fuel prices in advance). Weakness in the morning session could reverse within the same day.
The current market situation is based on reports covering morning trading. If subsequent disclosures or additional news emerge, stock-price trends may change.