Those concerns are battering airline stocks even as earnings reports point to a continuing consumer appetite for travel. Shares of United Airlines fell about 10% on Wednesday, dragging down the broader the NYSE Arca Airline index , after the Chicago-based carrier forecast lower-than-expected fourth-quarter profit on rising expenses.
Strong demand from travelers has so far allowed carriers to mitigate inflationary pressure with higher fares. While both United and Delta said travel demand is holding up, double-digit declines in airfares year-over-year suggest airline pricing power has peaked. Airlines are likely to see "a more dramatic negative effect" than in the past if there is any downturn in demand because their cost of doing business has gone up materially, Mulberry said.
United, which has not forecast profit for 2024, on Tuesday similarly said travel demand remains "strong and steady." Similarly, United projects its average fuel bill will increase by 11% in the December quarter from a quarter ago.New Chief Financial Officer Michael Leskinen told investors on Wednesday the company's non-fuel operating costs in the fourth quarter would rise by about 1.5 percentage points if its flights to Tel Aviv remain suspended through the year.
Holiday Holiday Latest News, Holiday Holiday Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: Reuters - 🏆 2. / 97 Read more »
Source: Reuters - 🏆 2. / 97 Read more »
Source: KSLcom - 🏆 549. / 51 Read more »