U.S. airlines' shares fall as oil spikes

NEW YORK (Reuters) - Shares in U.S. airlines fell on Monday, led by a 10 percent drop by American Airlines' parent, as oil prices marked a new record.

Soaring oil prices and the stuttering U.S. economy threaten to choke off the U.S. airline industry's fledgling recovery by increasing costs and sapping demand.

"It's going to be a tough first quarter for the carriers if we don't get some relief from these oil prices," Calyon Securities analyst Ray Neidl said.

The price of oil, which affects the cost of jet fuel, rose above $107 a barrel for the first time on Monday.

The Amex airline index .XAL fell 5.1 percent, flirting with its lowest levels in five years.

AMR Corp (AMR.N: Quote, Profile, Research), parent of the world's largest carrier American Airlines, dropped 10 percent to $10.29. Continental Airlines (CAL.N: Quote, Profile, Research) fell 6.5 percent to $21.94.

Delta Air Lines (DAL.N: Quote, Profile, Research) and potential merger partner Northwest Airlines Corp (NWA.N: Quote, Profile, Research) both fell more 5 percent. Delta dropped to $12.17, while Northwest sagged to $12.36.

Meanwhile, regional carrier ExpressJet Holdings Inc (XJT.N: Quote, Profile, Research) plunged 14 percent to $1.92 after posting a wider-than-expected fourth-quarter loss.

(Reporting by Chris Reiter, editing by Maureen Bavdek)