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Weak day for airline stocks after Delta warns on global capacity

  • Airline stocks are showing weakness after sector leader Delta disappoints with its report on June PRASM.
  • The sector was due for a little bit of a blowoff, according to many industry insiders. Delta's stance that global capacity is on the rise provided the spark.
  • Decliners: United Continental (UAL) -5.4%, Delta Air Lines (DAL) -4.7%, American Airlines Group (AAL) -3.0%, Allegiant Travel (ALGT) -2.9%, Hawaiian Holdings (HA) -2.2%, JetBlue Airways (JBLU) -2.0%, Alaska Air Group (ALK) -2.0%.
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Comments (14)
  • tarheelboy
    , contributor
    Comments (193) | Send Message
     
    Delta didn't warn of anything; your headline did. Delta's numbers are fantastic. Just another example of negative press. Delta is on course to better its 2014 predictions for capacity, earnings, etc. slant it anyway you want, those are facts.
    2 Jul, 01:03 PM Reply Like
  • menuchem
    , contributor
    Comment (1) | Send Message
     
    AAL BUYING Opportunity for longer term hold.
    2 Jul, 01:06 PM Reply Like
  • canyonclimber
    , contributor
    Comment (1) | Send Message
     
    Took three international flights recently ... stunning the amount of open seats left. especially out of US... MSP to CDG flight 50 % maybe...?
    2 Jul, 01:06 PM Reply Like
  • ritam2001
    , contributor
    Comments (203) | Send Message
     
    Agree, have noticed the same. Are US travellers on the decline? Internationally, more and more people are travelling.
    2 Jul, 01:16 PM Reply Like
  • rlarge1949
    , contributor
    Comments (18) | Send Message
     
    Look at the Int'l R/T prices. That will answer your empty flights comment.
    2 Jul, 01:57 PM Reply Like
  • spald_fr
    , contributor
    Comments (2728) | Send Message
     
    Air travel has become human abuse.
    2 Jul, 02:06 PM Reply Like
  • zorro2828
    , contributor
    Comments (595) | Send Message
     
    AAL caught a ratings increase and new target today and it sold off with the rest even though the target was raised to $54 .. can not believe this negative slant... airlines have consolidated flights and load factors have been on the increase.. not sure about international as my travel is between cousins Canada and the US .. and there I can say with authority.. the flights are FULL .. Great long term opportunity for a LONG investor today... bought another 1000 and we will see you at $50 by Christmas! Ciao and Happy Red, White and Blue to all my US cousins..
    2 Jul, 01:20 PM Reply Like
  • abdullah999
    , contributor
    Comments (299) | Send Message
     
    I think that capacity comment is causing this sell off. $AAL still looks cheap IMO but a good investment return from the airlines hinges on favorable jet fuel prices, increased demand and somewhat tame increases in capacity. So far, all three have helped propel the majors to unparalleled levels of profitability. Let's see if the good times keep rolling...
    2 Jul, 01:30 PM Reply Like
  • starcorral
    , contributor
    Comments (498) | Send Message
     
    The key factor in mid term guidance is based solely responsive management and reliable execution. Delta and American are filling planes and studying routs to the extent that marginal performance has virtually left their nomenclature. Here in Tulsa a new AAL rout announced today will fill a void with direct flights to Charlotte which was a USAir stronghold for as long as I can rememeber.

     

    Capacity "worldwide" need not scare us as our economy keeps ratcheting up. International routes although important to U.S. companies hare less of a factor than the overseas competition where there is more volatility.

     

    Again - if a drop like this makes you think too much about selling rather than dip buying, you need to revisit your longer term plan.
    2 Jul, 02:15 PM Reply Like
  • goldbaum
    , contributor
    Comments (92) | Send Message
     
    Added shares of both AAL and DAL today .Will buy some more if prices drop further.
    No "falling knife" theory here.Buying the dips has and will work with both stocks,
    as the positive business trend for airlines isnt over yet.
    The pricing power and margin expansion are intact. Its hard to believe what slanted
    reporting can do.
    DAL has reported excellent numbers and surely AAL will follow.
    2 Jul, 03:02 PM Reply Like
  • starcorral
    , contributor
    Comments (498) | Send Message
     
    Being intelligent, it took me little time to figure that it costs more to fill up an airplane - you know - once you've selected your fuel grade and entered your zip code. However being the decadent jackass I am, I told my wife - "big deal; it will cost us 30 extra bucks round trip to Tuscon in the Accord."

     

    Actually any airfare surcharge may impact us a tiny bit more because she is staying over flying back after I drive back, so we get a double whammy. Big deal, we'll postpone our plans for 2 at Olive Garden and instead have a tomato with cottage cheese.

     

    When you own a few thousand shares total of DAL and AAL, you can't beat yourself about the head trying to decipher a 5 to 7 grand swing over a few days. Sure you can try to figure it out, but then you could also try to figure out who to call to begin arranging a meeting with Kevin Bacon. How far removed are you?

     

    Let's get real here. Delta and American are in just fine shape. American just announced a new route needed and missed for a long time: Tulsa -Charlotte. We always needed a direct affordable route from 1995 - 2005 but we don't fly there anymore. The flights will likely run near full and be priced competitively for connecting alternatives when connectors on other routes get run out.

     

    All things being equal and the oil situation in Iraq [as meaningful to most of us as Rocky's and Bullwinkle's anniversary] won't prompt me to trade for an electric.

     

    The grand masters who see 50+ in store for these two sterling examples of efficiency and altruism appear comfortable with their "sooth says" only 6 months after Cramer gave us commoners the approval to buy them without getting dirty looks from all the gurus with whom we cross paths.

     

    Capacity issues are hallmarks of growing economic well being. As has been the recent history of Delta polishing itself to glow and American forging on "DAMN THE TORPEDOs" in the face of a half billion dollar bankruptcy, the ability to identify, quantify, and adapt to a public wanting to effectively get from one place to another and back is best found in how well they fill the tubes.
    2 Jul, 03:51 PM Reply Like
  • Harm Elderman
    , contributor
    Comments (555) | Send Message
     
    This was a solid buy for more DAL.

     

    Gimme gimme gimme gimme. Only under 30 I will flush them through the toilet. Then again more than two years ago I got them under 10.

     

    Still a little afraid for any upcoming correction.
    2 Jul, 04:21 PM Reply Like
  • Sid Smallhands
    , contributor
    Comments (379) | Send Message
     
    Today was all about The Chaaaaaaaaaaaaaaaaaaaa...
    2 Jul, 07:41 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9049) | Send Message
     
    I fly BOS to LGA every week. Half the seats are empty. May be more.
    2 Jul, 09:15 PM Reply Like
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