Here’s Why Airplane Stocks Are Still Free-Falling
The FAA shutdown has taken a toll on investors’ confidence in airline stocks, though that isn’t the major thing driving air carriers into the red this morning. Southwest Airlines (NYSE:LUV) reported weak second quarter earnings this morning, falling short of estimates in terms of both revenue and per share earnings. Even scarier to investors was the company’s disclosure that it plans to sideline some of its fleet of planes in the third quarter due to projected increases in fuel costs. Airline stocks have reeled over the past two weeks thanks to an partial FAA shutdown which has left safety inspectors unpaid and perhaps unmotivated to work. Tax collection on air fares has also been halted until the agency receives more funding. Airlines have since raised ticket prices to bank on tax proceeds that would have been forfeited, though the move has not swayed investors’ sentiments, with the majority of leading air carriers ticker price down double digits in the past 30 days.
Here’s a look at how popular airline stocks are performing in trades:
United Continental Holdings (NYSE:UAL): -3.64%, US Airways Group (NYSE:LCC): -5.08%, Delta Air Lines (NYSE:DAL): -5.17%, AMR Corp. (NYSE:AMR): -5.33%, Southwest Airlines Co. (NYSE:LUV): -7.46%, JetBlue Airways Corp. (NASDAQ:JBLU): -5.29%, Alaska Air Group (NYSE:ALK): -3.88%, and Hawaiian Holdings (NASDAQ:HA): -3.22%.