Disappointing outlook from Delta drags down airline stocks
ATLANTA (AP) — Airlines are getting pummeled after a major carrier trimmed its revenue expectations for the fourth quarter.
Delta Air Lines said Thursday that fourth-quarter revenue will rise about 7 percent, a half-point lower than it was expecting. The Atlanta airline says prices for tickets sold close to departure — often at higher prices — grew less than expected in late December.
While Delta said travel demand remains healthy, it raised the specter of a weaker quarter for one airline seeping into 2019 in a broader sense, and there are already growing concerns about slowing global economic growth.
The 15 worst performing stocks on the S&P 500 Thursday included Delta, American Airlines Group, United Continental and Alaska Air.
Delta shares plunged about 10 percent, its worst one-day showing since 2012.
The apprehension, according to Cowen analyst Helane Becker, is that any gains from cheap fuel prices in recent months will be lost as airlines are forced to cut fares to lure travelers.