US airlines face an "existential threat" from surging jet fuel prices that may drive costs dramatically higher, according to Deutsche Bank. Jet fuel prices in the US have more than doubled year-to-date while crude oil advanced about 50% in the same period, creating the widest crack spread since 2005. The last time this happened, Delta Air Lines and Northwest Airlines filed for bankruptcy.

Deutsche Bank analyst Michael Linenberg warned that "some of the industry's financially weakest carriers could halt operations" without near-term relief. Airline stocks extended their slide on Friday alongside other travel and logistics companies, with the sector gauge down 19% across six trading sessions heading for its worst stretch since April. The firm joins other analysts sounding alarms about the escalating conflict in Iran's impact on airlines.

American Airlines Group Inc. saw its stock downgraded this week at Rothschild & Co. Redburn, which now expects the carrier to lose money this year as it pays more for fuel. With airlines around the world potentially forced to ground thousands of aircraft, the industry faces its second year of turmoil as fuel costs surge. The widening crack spread threatens to push already-struggling carriers into financial distress.