Texas Business Law Blog

After peaking at over $147.00 a barrel just weeks ago, oil prices have dropped over twenty dollars to just over $126.00 a barrel today. While the prices are still high compared to a year ago, and there is no assurance that the decreased price isn't only temporary, at least for the time being airline stocks have responded positively.

The price of oil has had a tremendous impact on the airline business. AMR Corp.'s (American Airlines) stock, which has traded as high as $29.00 a share in the past year, was trading for as low as $4.00 a share only 8 days ago. As of the posting of this blog, the price of American's stock has increased to over $9.00 a share. While other factors surely come into play, the inverse reaction that airlines stocks have to the oil market is undeniable.

The drop in oil prices is much need good news for the airlines industry, which has suffered bankruptcies, significant job cuts and flight cuts in 2008.