Updated from 11:07 a.m. EDT

A combination of higher oil prices and lackluster June results sank airline stocks on Tuesday, as JetBlue Airways ( JBLU) announced that it filled fewer seats than it did last year at this time.

JetBlue said that traffic, a demand metric measured in revenue passenger miles, rose 41.1% in June from the year before. But the rapidly expanding low-cost carrier said that capacity, a supply metric measured in available seat miles, rose 43.6% year over year. With supply outpacing demand, JetBlue filled 85.5% of its seats in June, down from 87% a year ago.

With the price of oil jumping from less than $36 to about $39 over the last four sessions, hopes that the airline recovery could get a boost from a drop in fuel costs -- the second-largest expense at an airline after labor -- are fading. And with travel demand offset by increasing supply and fare wars, sentiment has been pessimistic heading into the release of second-quarter earnings, due to start on July 15, when Southwest Airlines ( LUV) announces results.

Shares of JetBlue sank 96 cents, or 3.3%, to $27.76, while the price of oil rose 59 cents, or 1.5%, to $38.98. As a result, the rest of the airline sector was largely negative. The Amex Airline Index was off 2.8%, led lower by Delta Air Lines ( DAL), off 28 cents, or 4.1%, to $6.56; and Continental Airlines ( CAL), off 41 cents, or 3.6%, to $10.92.

Elsewhere, regional carrier Alaska Airlines ( ALK) announced that June traffic increased 12.1%, while capacity increased just 6.8%. As a result, Alaska filled 76.6% of the seats on its flights vs. 73% a year ago. Alaska shares fell 48 cents, or 2.1%, to $22.61.

Some carriers, most notably Northwest Airlines ( NWAC), which has been more conservative than rivals in adding capacity, packed passengers into planes during June. Northwest announced that it filled 86.4% of its seats in June, up from 81.8% a year ago. The carrier's traffic rose 12.7% against a capacity increase of 6.7%. Shares still fell 41 cents, or 3.8%, to $10.44.

Delta Air Lines ( DAL) filled 81.9% of seats during June, up from 80.5% a year ago. The carrier, which is currently engaged in a battle with pilots over pay cuts, said traffic increased by 16.6%, while capacity increased 14.6%. Delta shares were off 24 cents, or 3.5%, to $6.60.