U.S. airline shares fall sharply on oil rally

CHICAGO (Reuters) - Airline stocks fell sharply on Wednesday as the price of a barrel of oil -- directly linked to the price of jet fuel -- rallied more than $4.

Delta Air Lines (DAL.N: Quote, Profile, Research) shares suffered the largest percentage decline in midday trading, falling 10.2 percent to $8.95 on the New York Stock Exchange. Northwest Airlines (NWA.N: Quote, Profile, Research) shares were down 9.8 percent at $9.06 on the NYSE. The Amex airline index .XAL shed 7.6 percent.

Calyon Securities analyst Ray Neidl said the drop in share prices was the result of the oil price spike. Nymex crude CLc1 was up $4.20 at $105.42.

Earlier on Wednesday, AMR Corp (AMR.N: Quote, Profile, Research), parent of American Airlines, said it voluntarily canceled nearly 10 percent of its flights to check plane wiring to comply with a request by the Federal Aviation Administration.

AMR shares were weaker after the news and were down 7.4 percent at $8.92 on the NYSE.

Shares of UAL Corp (UAUA.O: Quote, Profile, Research), parent of United Airlines, were down 7.8 percent at $22.24 on Nasdaq.

(Reporting by Kyle Peterson; Editing by Brian Moss)