Delta, JetBlue, American and other big U.S. carriers had been rewarded on Wall Street for the past few years thanks to increased demand from business and leisure travelers, a boost in revenue from all those annoying extra fees and, of course, low oil prices.
That combination led to big earnings for an industry that often had trouble generating profits due to fare wars and higher fuel costs. But most of the major airline stocks are down sharply this year.
Rising fuel prices have hurt them, even though some airlines have fuel hedges in place to mitigate the impact of volatility in the oil market.
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Delta, JetBlue, American and other big U.S. carriers had been rewarded on Wall Street for the past few years thanks to increased demand from business and leisure travelers, a boost in revenue from all those annoying extra fees and, of course, low oil prices.
That combination led to big earnings for an industry that often had trouble generating profits due to fare wars and higher fuel costs. But most of the major airline stocks are down sharply this year.
Rising fuel prices have hurt them, even though some airlines have fuel hedges in place to mitigate the impact of volatility in the oil market.
The industry may also have added too many flights and now needs to cut back. JetBlue recently said that it would reduce capacity for the rest of the year. Worries about the Zika virus haven’t helped either.
And now, terrorism is once again a legitimate concern. Airline stocks have all taken a big hit this week following the tragedy at the Pulse nightclub in Orlando, one of the world’s most popular tourist destinations.
It’s too soon to tell if the attack in Orlando will hurt travel to Florida — or elsewhere for that matter.
Read more at CNN Money
Image courtesy of airlinereporter.com
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