The airline industry is readying for takeoff as more and more people receive their vaccinations. However, airline stocks are still in disarray as companies scramble to recoup the losses they are suffering from 2020. The industry is shook today with a piece of news that is dropping stock prices.
Industry giant United Airlines (NASDAQ:UAL) is catalyzing the losses this morning with a less-than-satisfactory earnings report. The company reported its fifth consecutive quarterly loss. This is not unexpected; after all, the novel coronavirus pandemic did start five quarters ago. The company was anticipating losses, but what it saw on the report was worse than expected. As fuel costs continue to rocket upward and the company saw fewer flights in operation, UAL saw a net loss of $2.4 billion.
Airline Stocks Look to Rebound Later in 2021
The company predicts a return to profitability later in the year, even in the midst of still-rising fuel costs.
Traffic was down 80% from pre-pandemic levels, but there is certainly an itch for international travel that will be scratched as travel restrictions are lifted. United has already added three international flight options to countries that are accepting vaccinated travelers. Greece, Iceland and Croatia are the options, with the trio of countries opening their borders in anticipation of attracting tourism revenue. United Airlines CEO Scott Kirby is also confident in domestic travel ramping up greatly in coming months. Kirby has said that domestic travel to popular tourist spots has surpassed the amount of bookings the airline saw in 2019.
Still, the report is damaging to the airline sector. UAL stock prices dipped nearly 10%, with share prices down to $49.90. Other airline stocks are falling in sympathy, with investors figuring other companies will report similar losses. Delta Airlines (NYSE:DAL) is down by 5% today, trading at $43.87. American Airlines (NASDAQ:AAL) has tanked 7%, with shares exchanging at $20. Investors are likely to see airline stocks lower still as American and Delta release earnings reports of their own.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article.