Why United Airlines Stock Hit Turbulence Today
United Airlines Holdings (NASDAQ: UAL) announced a massive new airplane order this morning, and investors are not sure what to think. Shares of United initially traded up as much as 3%, but then fell 7% on a volatile day for stocks more broadly. As of 1:28 p.m. ET, the stock was down 6%.
United has been a relatively stable flyer in a turbulent year, with its shares outperforming the S&P 500 by about 10 percentage points. Strong demand for travel has allowed the airline to offset higher fuel and labor costs, and in October United CEO Scott Kirby said he believes there has been a "permanent structural change in leisure demand because of the flexibility that hybrid work allows," meaning demand is holding up better at times that were traditionally quiet.
But United has one of the older fleets in the industry, and it's going to need a lot more planes to keep up with future demand. On Tuesday, United inked a massive 200-plane order with Boeing to meet the future needs of the business. United is buying 100 new 787 Dreamliners with options to buy 100 more, a deal that represents the largest widebody aircraft order in U.S. aviation history.
Source Fool.com
