Here’s Why Airline Stocks Are Losing Altitude Now
Quick answer: Major airline carriers have started jacking up fares as they look to capitalize on a temporary shutdown of the FAAs tax collection arm. The branch of the Federal Aviation Administration was partially shut-down over the weekend when lawmakers failed to agree on a short term appropriation of funding for the government agency, which has been running on such extensions since 2007. Part of the group affected by the shutdown was its tax collecting service, which charges airlines an avg. rate of $60 per ticket on domestic flights for fuel (NYSE:UGA) and passenger taxes. In response to the shutdown airlines are raising prices to look to make up for dwindling balance sheets (See major airlines’ Q2 earnings) amidst one of the most costly years in recent history (due to high energy prices) for the industry.
Here’s a look at how a number of popular airline stocks are trading today:
United Continental Holdings (NYSE:UAL): -4.71%, Delta Air Lines (NYSE:DAL) -3.09%, AMR Corp., American Airlines, (NYSE:AMR) -3.90%, JetBlue Airways Corporation (NASDAQ:JBLU) US Airways (NYSE:LCC) -4.85%, Alaska Air Group (NYSE:ALK) -3.68%, Southwest Airlines Co. (NYSE:LUV) -1.54%, and Hawaiian Holdings (NASDAQ:HA) -3.61%.