Airlines’ $10 Billion August Swoon Keeps Wall Street on Edge
5 Sep 2017 21:04:23
bloomberg.com
U.S. airline investors, already absorbing the worst monthly stock performance in a year, are bracing for more disappointment.
A Standard & Poor’s index of the five biggest U.S. airlines plunged 7.5 percent in August, wiping out about $10 billion in market value. Shares fell as a price war that started between United Continental Holdings Inc. and heavy discounters spread to more carriers and markets.
Analysts see more pain ahead. UBS Group AG predicts the latest skirmish will force some carriers to lower their third-quarter forecasts for revenue for each seat flown a mile, a closely watched gauge of pricing power. The trend is worrisome because the major airlines have been boasting that industry consolidation would lead to steadier profits and smoother shareholder returns -- not repeated fare battles with low-cost rivals.
Read full story: bloomberg.com
