Airline Stocks Slump After FAA Grounds Domestic Flights

  • Airline stocks were falling early this morning.
  • The drop was due to an error grounding thousands of flights.
  • Airline stocks have since recovered in Wednesday morning trading.

Airline stocks. Southwest airplane

Airline stocks weren’t doing so hot in pre-market trading Wednesday after the Federal Aviation Administration (FAA) grounded domestic flights.

The reason behind this grounding was a computer outage affecting the Notice to Air Missions (NOTAM) system. The system includes critical information that airline workers need to do their jobs. Without NOTAM, the agency was forced to ground some 5,400 flights.

According to the White House, there’s “no evidence” that this outage was caused by a cyber attack. Even so, President Joe Biden has ordered the Department of Transportation to do a “full investigation” into the incident.

It makes sense that airline stocks would drop alongside the grounding of flights. That’s money lost for these companies, as they have to delay and reschedule flights once the NOTAM system is up and running again.

Airline Stocks on the Move Wednesday

Most airline stocks were down in pre-market trading today following the NOTAM news. However, many of them have since recovered and are now seeing slight gains after the early morning dip. That includes shares of American Airlines (NASDAQ:AAL), Delta Air Lines (NYSE:DAL) and Southwest Airlines (NYSE:LUV).

Investors seeking out more of the latest stock market news will want to stick around!

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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

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