Why Shares of United Airlines Are Falling Today
Shares of United Airlines Holdings (NASDAQ: UAL) fell more than 14% earlier in the day as investors continue to weigh the significant challenges facing the industry. As of 4:20 p.m. EDT, the stock was down 8%. Airline stocks enjoyed a multi-day rally last week as Congress finalized an industry relief bill, but United issued a dire warning after markets closed Friday that caused that momentum to collapse.
Airlines have been hit hard by the COVID-19 coronavirus pandemic, which has caused travel demand to fall to near-zero. United and other airlines have responded by cutting flights and grounding aircraft, but no amount of cost cutting is enough if there isn't revenue coming through the door.
Lawmakers earmarked $50 billion in loans and grants for the industry as part of a broader $2 trillion economic stimulus plan designed to help the airlines weather the storm. The money comes with restrictions, including prohibiting layoffs or furloughs through Sept. 30.
Source Fool.com
