What Just Happened to Airlines?

789

Delta Air Lines (DAL) got a mention on yesterday’s Market Action segment, and today it’s hitting turbulence.

Sure, management announced that it carried a record 15.2 million passengers in September. It also set new high-water marks in July and August. While that’s positive for earnings, other forces caused a down draft.

First, higher fuel costs threaten profitability. Oil prices rose in the third quarter and have reached their highest level since 2014.

Second, the weather is a problem. First you had Hurricane Florence, and now Michael is bearing down on Florida. In addition to grounding flights, that will force the company to waive cancellation and re-booking fees.

In conclusion, the economy is strong and airlines have enjoyed good traffic. But other forces are dragging them down.

Delta Air Lines (DAL), with 50-day moving average.
Advertisement
Trade in milliseconds

Explore the most actively traded options

Trade 600+ futures products on an advanced platform