Why Airline Shares Are Down Today
Shares of American Airlines Group (NASDAQ: AAL) fell more than 9% on Thursday morning, and shares of Delta Air Lines (NYSE: DAL) and Southwest Airlines (NYSE: LUV) each fell more than 6%, on continued coronavirus worries. Investors have been concerned for weeks that the virus would impact travel plans, and Wall Street analysts are beginning to try to get a sense of the damage done to the businesses.
Airline stocks are a natural target for a coronavirus-related sell-off, with companies sure to see revenue declines in the first quarter due to cancelled flights. The more recent concern is that the spread of the virus into new regions would stunt global demand, and might weigh heavy on the minds of U.S. consumers as they book summer vacation travel.
On Thursday a number of airline stocks were downgraded by Deutsche Bank and Buckingham due to coronavirus concerns. Deutsche Bank analyst Michael Linenberg said that there is an increasing risk the coronavirus will impact travel patterns in the U.S., affecting peak travel periods including spring break, Easter, and summer. It could also impact business travelers, which tends to be a more lucrative business for airlines.
Source Fool.com
