Airline stocks fell Monday in midday trading as crude oil prices hovered just beneath the $100 per barrel level.
Airline shares tend to move in the opposite direction of oil prices, since fuel represents one of the industry's highest costs.
The Amex Airline Index fell 1.5 percent to 34.75 in morning trading as light, sweet crude for April delivery was up 19 cents at $99 a barrel on the New York Mercantile Exchange. The contract climbed as high as $99.70 a barrel earlier on supply concerns.
Airline investors still awaited news from reported talks between certain carriers about potential mergers or acquisitions. High oil prices have driven the industry toward consolidation as a way to cut costs, control capacity and raise ticket prices.
Soleil Securities analyst James M. Higgins expects a combination of Delta Air Lines Inc. and Northwest Airlines Corp. to occur, despite what he called "pilot nitpicking" over integrating the carriers' labor forces. Talks between the two carriers have reached a stalemate because of an impasse over how to handle pilots' seniority.
Delta shares fell 60 cents, or 3.6 percent, to $15.78 while Northwest dropped 77 cents, or 4.7 percent, to $15.50.
Higgins also valued a combined Continental Airlines Inc. and UAL Corp. at more than $19 billion, or $59 per share, in a note Monday, noting that some potential risks and benefits are difficult to assess. He maintained a "Buy" rating on both carriers' stocks.
Continental shares fell 37 cents to $28.43 as UAL fell $1.05, or 3 percent, to $34.44.
Frontier Airlines Holdings Inc.'s stock fell 1 cent to $3.09.
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