Why Delta Air Lines Is Leading the Entire Airline Sector Down Today
Delta Air Lines (NYSE: DAL) is the first airline out of the gate with earnings, and the company's disappointing results and tepid guidance are rippling through the entire sector. Shares of Delta fell as much as 8% on Wednesday morning, while shares of United Airlines Holdings (NASDAQ: UAL), American Airlines Group (NASDAQ: AAL), and JetBlue Airways (NASDAQ: JBLU) all fell as much as 5%.
Airline investors are coming into earnings season not sure what to expect. Strong summer vacation demand is expected to prop up revenue, but those gains are likely to be at least somewhat offset by higher fuel and labor costs. Throw in a shortage of pilots and concerns about summer congestion, and it is hard to predict just how much airlines will be able to benefit from that strong demand.
On Tuesday, American gave the industry a boost when it said that it expects its results from the now-completed quarter to come in within expectations. But on Wednesday, Delta became the first airline to actually publish results, and investors are not pleased with what they are seeing.
Source Fool.com
