Investing.com — Airline stocks have historically outperformed in the months following a peak in oil prices, but analysts caution that the demand picture complicates any straightforward bullish read, particularly for carriers still navigating the fallout from this year’s energy shock.

Wolfe Research analyst Scott Group told clients in a note on Friday that the sharp drop in jet fuel prices following the U.S.-Iran ceasefire announcement is a welcome development for the sector. 

He noted that guided second-quarter revenue per available seat mile above 13%, well above Wolfe’s prior estimate of 9% and the firm’s initial pre-oil-spike forecast of 5%.

Group explained that historical data shows airline stocks tend to outperform the broader market in the one-, three- and six-month periods following a peak in oil prices. 

However, he flagged a key risk. “Each of these peaks in oil has been followed by lower year-over-year RASM in the following year,” he wrote. 

Group believes the critical question ahead is whether airlines can sustain revenue momentum if fuel costs normalize, noting he is already modeling lower year-over-year passenger RASM for Delta next year as a partial offset to more normalized fuel.

Meanwhile, Peter Corey, Chief Market Strategist at Pave Finance, offered a more cautious read, noting that airline relative strength compared to the S&P 500 does not reliably improve simply because oil has peaked and begun to fall.

“Lower fuel costs do help margins but when crude spikes hard enough, it also acts as a tax on the consumer and raises the odds of an economic slowdown,” Corey told Investing.com. “Because airlines are a textbook cyclical industry, weaker travel demand can easily overwhelm the benefit of cheaper fuel.”

“After major oil peaks, the market often stops focusing on fuel relief and starts focusing on demand risk instead,” he added.

Elsewhere, Trade Nation’s Senior Market Analyst, David Morrison, told Investing.com that “a look at the charts of some of the major airlines is very instructive as it indicates exactly what the market is currently pricing in.”

“For a start, most have had a torrid time since February, and in some cases since the beginning of the year. But now , along with , and all look as if they’re bottoming and possibly turning higher,” he explained. “The turnaround in has been far sharper with less of a bottoming structure, so possibly less reliable. Delta Air Lines hasn’t suffered unduly, but it does have the advantage of owning an oil company.” 

Morrison added that investors seem to remain convinced that this will turn out to be a relatively short war and that any wider disruption should be minimal.

“Traders are keeping a close eye on crude oil futures, particularly , which are currently forecasting a significant easing in price by the summer. It’s quite possible that everyone is being overly optimistic. But it’s probably fair to expect a relief rally, however brief as soon as the Strait of Hormuz is reopened for transit,” he concluded, warning that if Iran continues to control and block most of the shipping attempting to pass through the Strait, “then all bets are off.”