It’s the Airline Stocks Again: Ugly Day, Ugly Week, Ugly Long Term

My Airlines Index plunged 14% for the week. But long-term, it’s even worse: -45% since Jan. 2018.

By Wolf Richter for WOLF STREET.

Airline stocks had a horrible day, waylaid by the general downdraft of the market, the spiking jet fuel prices, and the routing chaos around the Ukraine and Russia, along with passenger traffic that is still below where it had been before the pandemic on the lucrative international routes, and with the expense-account crowd being slow to show up.

Here are the stocks of the largest US airlines in order of their losses today, and their closing prices.

  • United Airlines [UAL]: -9.1% to $36.71
  • American Airlines [AAL]: -7.1% to $14.59
  • Frontier [ULCC]: -6.4% to $11.50
  • Spirit Airlines [SAVE]: -6.3% to $22.32
  • Delta Air Lines [DAL]: -5.6% to $34.52
  • Alaska Air Group [ALK]: -4.4% to $49.14
  • JetBlue Airlines [JBLU]: -4.1% to $13.21
  • Southwest Airlines [LUV]: -2.4% to $40.68

My Airlines Index, which tracks these largest 8 US airlines by market cap, dropped 5.6% today and 14.8% for the week. It has been a very bumpy flight for airlines for months – I mean, for years. My index is down 45% since the beginning of 2018. After briefly recovering to pre-pandemic levels last spring, it hit one air pocket after another, and is now 29% below February 2020 (data via YCharts):

United’s 9.1% plunge today came “on what proved to be an all-around grim trading session for the stock market,” lamented the article-writing algo, named “MarketWatch Automation.” (I always thought I could never-ever be replaced by article-writing algos, but when they start coming up with phrases like “grim trading session,” I might need to do some reassessing here).

After having booked gigantic losses in 2020, including $12 billion by Delta, three airlines started making money in 2021:

  • Southwest: +$977 million
  • Delta: +$280 million
  • Alaska Air: +$478 million.

The others still lost money in 2021:

  • United: -$1.96 billion
  • American: -$2.0 billion
  • Spirit: -$473 million
  • Frontier: -$102 million
  • JetBlue: -$182 million

As of today, compared to February 2, 2020, airline stocks are down between 27% at the better end (Delta and Alaska) and 39% at the worse end (Spirit and Frontier the two biggest low-cost airlines in the US). By comparison, the S&P 500 Index, despite the recently “grim trading,” is up by 28% over the same period.

Spirit and Frontier, whose stocks are down the most, announced a month ago that they’d agreed to merge.

The year 2022 was going to be the big year, with international leisure and business travel revving back up. But the current situation, including the spiking prices for jet fuel, is producing a lot of jitters for airline stocks.

The Big Four will forever be infamous for having incinerated $44.7 billion in cash on buying back their own shares between Q1 2012 and March 2020, when they stopped. The purpose was to enrich their shareholders, which didn’t work very well, obviously. And then, in March 2020, sorely needing the cash they’d previously incinerated, they went begging to the taxpayer for a massive bailout package mostly in form of grants. Taxpayer capitalism in its best form:

Enjoy reading WOLF STREET and want to support it? Using ad blockers – I totally get why – but want to support the site? You can donate. I appreciate it immensely. Click on the beer and iced-tea mug to find out how:

Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here.




  106 comments for “It’s the Airline Stocks Again: Ugly Day, Ugly Week, Ugly Long Term

  1. 2banana says:

    That’s not capitalism.

    “And then, in March 2020, sorely needing the cash they’d previously incinerated, they went begging to the taxpayer for a massive bailout package mostly in form of grants. Taxpayer capitalism in its best form”

    • Wolf Richter says:

      “Taxpayer capitalism.” Taxpayers are shanghaied into providing the capital.

      • Duke says:

        Grants? Wtf!

        Why not lender of last resort and govt take an ownership interest and get paid back.

        • TimTim says:

          That’s not capitalism… :-)

        • Wolf Richter says:

          Yes, that would have been the better solution. Airlines lobbied against it. So it didn’t happen.

        • georgist says:

          Here’s something that might help move America forward:

          The airlines and the banks didn’t “lobby”. They used bribes to your corrupt politicians.

          America is so corrupt they made it legal and created a new word for it.

        • John H. says:

          What would have happened if no govt led bailout — no grants, no loans?

          Wouldn’t “the market” adjudged a fair price for a new private owner to takeover?

          Private old owners would have lost, private new owners (might) profit; but it the moral hazards of government involvement would be much lower, IMO.

        • cas127 says:

          Agreed, but one solution is (and always has been) the ability of the G to implement after-the-fact targeted (reasonable) taxes on the recipients of taxpayer largess (any recipients).

          The G always has this power…it has just been that both parties (which at various times have both been in exclusive/near exclusive power) have refused to implement it.

          Both parties far, far prefer to run the money printer (thereby incrementally dispossessing *everyone*) in order to run their DC sh*tshows.

        • buda atum says:

          “Govt take an ownership”.

          That would have been ‘socialising’ the airlines, and Americans don’t do ‘social’ last time I checked because it sounds too much like communism.

      • Blockhead says:

        That’s why it’s not capitalism.
        It’s just ransom money extracted under false pretense.

    • John S. says:

      The federal government’s bailout role in the airline industry seems to rhyme with similar recurring bailout episodes in the banking industry.

      Whatever happened to Schumpeter’s “creative destruction?” by which weaker firms with lesser ideas and worse management give way to their better-run competitors?

      And through all the subsidization, the federal government and its agencies grow ever larger…

      • Apple says:

        Don’t forget Corporations are People. It’s only a matter of time before only they can vote.

        • w.c.l. says:

          They do vote, it’s called campaign financing and the supreme court said they can “vote” as much as they want.

        • Jake W says:

          w.c.l.,

          i don’t like the corporatism we see in government either, but the fact remains that you don’t lose your free speech rights because you join together with other people.

          let’s say a town tries to ban barber poles. can you really tell me it’s legitimate to say that the two barbers who own it can protest, but not on behalf of the barber shop itself (a corporation)?

          in any case, those who opposed citizens united largely did so because they wanted their speech, like media and union speech and donations, allowed, while the opposition was silenced.

        • cb says:

          Jake W said: ” you don’t lose your free speech rights because you join together with other people.”
          —————————————
          a corporation is a distinct legal entity with a limitless life and that provides limited liability and a shield against criminal prosecution for stockholders

        • BuySome says:

          One man/One vote system. Each barber has a vote. But then Barbershop Inc. also gets to lobby claiming to represent two voices, thus adding a weight of four votes. Do that with a corporation employing 100K and you’ve now thrown the weight of 200K that can silence the opinion of 199,999 actual people on the other side. And this doesn’t even consider the full effect of pooled money to overwhelm the political debate. Corporations once had their own checks & balances in people like J.P. Morgan who could steer the entire ship back toward rationality with the wave of a hand. Now the headless idiots just buy off their counterparts in government and there’s no one left to say “Stop engines, full reverse!”. Giving these non entities the power of living being with suffering the consequences of bad decisions is the worst idea to ever be circulated. That’s just lawyer jibberish.

        • BuySome says:

          That’s “without the consequences”…see, a corporation marketed this faulty machine and it took a human to fix the mistake.

        • Augustus Frost says:

          Jake W,

          Correct, said the same thing many times. The intent is to strip the wealthy of their political defenses and plunder them using “democracy”.

          It’s as legitimate as having an “election” where two wolves and a sheep vote on the dinner menu.

        • LK says:

          Augustus,

          Are you a furry? Will your next example tell us about vultures in capitalism and leeches on the public coffers? Hawks versus doves on issues?

          People vote their interests and have opposing interests. That’s politics. The points being made are about balance of power in a late-stage capitalist which are a little morr sophosticated than who is ganging up on whom.

          The rich’s “political defenses,” jesus christ, as if they should have an outsized voice because of their outsized wealth to offset the poor’s numerical advantage.

          Won’t someone think of the billionaires?

        • LifeSupportSystem4aVote says:

          “Don’t forget Corporations are People.”

          I will not agree with the Supreme Court on this determination until the State of Texas executes one.

      • phleep says:

        Zombie nation. Even what starts as the best medicine with the best intentions (which might or might not have been this) can be harmful if abused. Even fatal.

        Government stepping in as a backstop (financial insurer) for mismanagement and failure has become quite the slippery slope. It is moral hazard and adverse selection (and insurance term, folks game it). All papered with magic fantasy dollars. It is like drunk daddy putting more promises on the maxing credit card. Altogether making a boomerang that can come back in a nasty way.

        • John H. says:

          “Giving money and power to government is like giving whiskey and car keys to teenage boys.”
          P.J. O’Rourke

        • NBay says:

          Yeah. Just let class warfare take it’s “natural free market” course and keep the pesky government out of it, especially those damned “unconstitutional” TAXES…..on “hard earned” private money piles.
          Ike was a commie for sure with that tax rate schedule of his….must have learned it from the biggest commie of all, FDR.

  2. Jackson Y says:

    I was fortunate enough to buy a bundle of airline stocks near their bottoms in spring 2020. By spring 2021, they had almost recovered to pre-covid levels, and I seriously considered selling. But then I decided, why not just buy & hold for the longer term instead of trying to time the market. If I hold for 5 or 10 years, eventually covid will be over & travel will recover.

    Huge mistake. I was too focused on the travel rebound (eg passenger numbers reported by TSA) without considering the effects of oil prices and other factors. My airline stocks have lost almost half their value since spring 2021.

    • phleep says:

      I hear some folks reciting buy-and-hold who I think are on shaky ground. This is not the 1980s, and they are not 25 anymore.

      Then again, I did a pretty big stock sale in early 2009 that locked in big losses. I sold off a lot again this last November. From there, into cash, which is shaky too. But at least I can pay my bills.

      • Jake W says:

        yes, a lot of people love to scream “buy and hold” and “time in the market is more important than timing the market” but those aphorisms were created during a time when the economy was growing, and by owning shares of profitable public companies, you were effectively taking part in the growing economy.

        the economy is no longer growing. all “growth” is fake, either created through debt, central bank printing, or both. since the economy is not growing, the only way stocks are going to repeat the performance of the past 40 years is if the ponzi scheme of “greater fool” investing continues, or if the stocks you own happen to take share of the economy from someone else.

        that’s it. i think a lot of people who are expecting 2020-2030 to be the same as 2010-2020 are going to be in for a rude awakening.

        • Anon says:

          We have an entire generation of investors now who have known nothing but good times. When things go bad they’ll behave like every generation before them.

        • LK says:

          That’s an excellent point about how stock market advice is based on the prevailing conditions of the market in recent decades. We’d need an economic contraction of some kind to repeat that performance over the long haul.

          Saving my money in the meantime. Picture is too muddled to know what the long is in going long on something.

  3. Mickey Donkey says:

    Wait until they double their fares with an emergency fuel surcharge

    • Steve W says:

      Airline ticket prices over the last 50 years have not kept up with inflation. Why? Airline employee compensation has also not kept up with inflation.

  4. Tom says:

    Travel is coming back. Look forward not in the rear view mirror. Everyone wants to go somewhere and that means flying and probably cruises too. This is a CYCLICAL space. If we are not at the bottom I suggest we are probably close to it. I am travelling this year and loving the cheap fares while they last.

    • Gattopardo says:

      Cyclical? When are the great years that offset the many many poor years?

      Gordon Gecko had it right — airlines, terrible business.

      Mickey Donk has it right, too, the surcharges are coming. I think there’s been a fuel surcharge on all major carriers for several years, even during low fuel prices. Which, BTW, is ridiculous. Just raise your fkn fares. Don’t add a b.s. surcharge at the end of booking.

      BTW, want a real laugh? Look at using FF miles between the US and Europe this summer. You can scrounge up some 30-40k tix here and there. But most are double that. And business class, more like 300k. One way.

      • Gattopardo says:

        Actually, slight correction, Gordo said terrible UNIONS.

        • Steve W says:

          Actually, the Railway Labor Act effectively handcuffs labor unions in the airline industry. They can’t strike without government approval, and that’s never going to happen, at least at the larger carriers. People want cheap tickets and reliable service and politicians know that, so airline workers can forget about having any significant leverage in negotiations with management.

          Management knows all of this too, so they stonewall negotiations for long periods of time. Labor contracts in the airline industry are usually 4-year agreements, but often are in effect for more like 6 or 7 years before management finally decides to renew them.

        • phleep says:

          Buffett: “If a capitalist had been present at Kitty Hawk back in the early 1900s, he should have shot Orville Wright. He would have saved his progeny money. But seriously, the airline business has been extraordinary. It has eaten up capital over the past century like almost no other business because people seem to keep coming back to it and putting fresh money in. You’ve got huge fixed costs, you’ve got strong labor unions and you’ve got commodity pricing. That is not a great recipe for success.” IN the same interview though, he acknowledged he had tried to make money in them: “I am Warren and I am an aeroholic.”

      • NBay says:

        Yeah. I may have to take all my summer trips to Europe in ECONOMY!
        Totally disgusting and completely unfair. I may even have less to spend when I get there!

    • Wolf Richter says:

      Look at the chart and tell me where the bottom is. The high in the chart was Jan 2018. So where is the bottom?

    • Augustus Frost says:

      Most people are actually broke. It doesn’t matter what they want. The country is in a crackup boom from the loosest monetary and fiscal policy in history.

      The economy was weak prior to COVID and didn’t magically become better since.

      What else is the government going to do to “kick the can” any further?

      • Harrold says:

        People aren’t broke, Augustus, because they have credit cards /s

        Seriously now. That $400 airline ticket is like $20 a month, forever. Not even noticable to the average consumer who shops based on a monthly payment. When the cards are maxxed out, they just default and start over. This is life for the lower middle class American.

        • NBay says:

          Kinda like the last “successful businessman” prez we had?
          Just using the laws of the land, ya know?

    • Nathan Dumbrowski says:

      Flights do appear cheap. How about the hotel, car and all the other expenses having to do with travel like meals, gas, tipping, entertainment?

  5. Peanut Gallery says:

    I was thinking to myself, what kinds of morons invest in airline stocks?

    And then I was like, oh wait a minute… are there any airline stocks in the S&P 500? If so, then I passively invested in them for years….

    • Apple says:

      Warren Buffet invested in all the airlines. He said it was a can’t loose investment because if one airline faltered, the other would be the recipient.

      And of course, there’s no way *all* the airlines would simultaneously loose money. That would never happen.

    • Wolf Richter says:

      Buffett did until he dumped his airline stocks.

      • eg says:

        Wasn’t it Buffett who waggishly offered this quip?

        “How to become a millionaire — start with a billion and buy an airline.”

        • NBay says:

          No. He said, “The first Billion is the hardest”.

          What insight that man has!

  6. Joe in LA says:

    We were looking at taking our first post-pandemic vacation trip in the US. Forget it — everything was ridiculously expensive — hotels, car rentals.

    Honestly, the whole country just seems like a ripoff now. I feel bad for the kids. We really left them a sack of…..

    • phleep says:

      I think that whole life menu of the blithe anywhere-tourist is ready for the evolutionary scrap heap. As you can imagine, I’m not in that industry. But for principled reasons. Why not make our places lovely liveable communities? How did we get baited to live in squalid bleak crowded places with the bait of leaving temporarily? Insanity.

      • VintageVNvet says:

        agree totally p leap:
        but, IMHO, just another example of the VAST and continuing power of the propaganda AKA advertising that is a CONSTANT barrage at those folks who will not turn off the TV, face hooks, etc., etc…
        clearly now a days that such propaganda can be not only recognized, but that those folks still ”sucked into it” can also be recognized…
        how to recognize such folks?? simply by their facial expressions matching those folks in the propaganda
        was NOT so easy to see back in the 1950-early ’80s era,,, but very very clear to even this old boy these days whenever having to adventure out into the ”mainstream” retail world
        can this be changed??? Very CLEARLY YES,,,

      • Viewat30k says:

        Right on. Now we have a fragmented/scattered society.
        Few close by friend and relatives. Everyone is somewhere else!
        Try to find a local camp spot or rec area. Pre reserved a year in advance full of rv’s and rude idiots.
        Too many ppl in any area worth
        Living!

    • Augustus Frost says:

      What kind of travelling do you have in mind?

      Before airline deregulation in 1978, flying was very expensive in the US. Before anyone could get a general purpose credit card, most Americans couldn’t “afford” many and maybe most vacations Americans take now.

      Historically, the type of vacationing American’s take for granted was financially out of reach.

      The majority of Americans are destined to become poorer or a lot poorer over the indefinite future and when they do, vacationing will more closely resemble what it used to look like. I can’t say it will revert completely, but a much poorer society isn’t going to be able to afford it as they have in the two or three decades.

  7. BuySome says:

    There’s good news here. Pretty sure most of us agreed a while back that the these human-shellfish canners ought to be allowed to go under to wash away the bad debt instead of being propped up with wasted subsidies. So now Wolf can save the cost of taking a look to see who’s reading his columns. And the survey says…NOBODY IN THE GOVERNMENT!

  8. Anthony says:

    Add to that , of course, the costs of war in Europe with West Texan Oil being $115.70 as I write. Add to that, next to no investment in oil exploration.( go green man) Add to that all the hundreds of thousands of Brits who may not fly to the USA on their holidays this year and visa versa.(who knows?) Put it all together, mix it up a bit and it appears that stocks in airlines are a pure bargain.

  9. drifterprof says:

    This month I needed to fly back to a corner of the empire, after 5 years outside America. For me, it became advantageous to get a few required in-person tasks done, like renew my state driver’s license.

    I was surprised how reasonable the costs were (I booked way ahead of time) — and Japan Airlines has excellent service and amazing in-flight meals.

    As expected, I’m experiencing the familiar nauseating experience of grass-roots decline in general American educational level, banal egocentric culture, and minimal consciousness of world reality.

    But I’m pleasantly surprised by the flexibility of my escape flight on Canadian Airlines – no fee for date/time changes. So there are some good alternatives to the United States based airlines clown-show.

    • Martin says:

      These other airlines can’t offer flights between different US destinations. Only from and to the US.

    • 2banana says:

      By far, American owned airlines are the worst.

      It is such a joy flying a foriegn based airline on an overseas flight. I am like…why can’t America do this?

      Here is a hint for me.

      One of the best meals I had while working in Guatemala was Pizza Hut. Yes, that Pizza Hut.

      Now, for the average local that would be a more on the expense side meal but still well within reach.

      Guatemala Pizza Hut:

      Greeted at the front door by hostess in white shirt and bow tie.
      The place is cleaner than your parent’s living room when company is coming over.
      Tables have clean white table cloths and flowers
      Promptly greeted by polite waiter in white shirt and bow tie.
      Etc. Etc. Etc.
      The food was about the same except hot and you could tall some one gave a damn putting it together.

      Gave a damn about the customer…

      • georgist says:

        The usual reason given for poor service on American airlines is profiteering.

        Alternative explanation, that other countries suffer from: a lack of competence exhibited nation wide.

        50% of Americans have a sub 6th grade reading level. Shouldn’t we expect that to manifest across industries?

        • COWG says:

          g,

          There is no negative recourse for incompetence…

          When fully the lower 1/3 of the US population is basically third world yet given a higher standard of living for free, there is no incentive to change behavior to succeed…

          As Augustus Frost, I believe, reiterates all the time, there will be a standard of living reset for many people…

      • VintageVNvet says:

        Your last sentence 2b!!!
        Not flying these days, but used to fly wwaaayyy TOO MUCH,,, and not surprised to see SW making best profit.
        While changes occur, SW was definitely the very best experience, with polite and helpful personnel, etc., etc.
        (Disclaimer: own NO interest in any airline.)

        • Harrold says:

          How can anyone STAND SW? Do they still have that policy of no seat assignments, so everybody has to stand in one long line, like sheep?

          If their systems can’t manage a simple seat number database, I can’t believe it isn’t one giant ball of incompetence.

      • COWG says:

        “ Gave a damn about the customer…”

        What a novel concept…

      • Michael Gorback says:

        When I visit family I usually take my dog on SWA. I’m required to stash her in her carrier under the seat. Last time it was $93 each way to give up my leg room.

        What financial burden does putting an animal under the seat place on the airline?

        • El Katz says:

          To name a few: Sanitation. Liability risk. Noise. Passenger complaints. Safety (interferes with aisle ingress/egress). A deterrent to more people bringing animals on board and annoying other passengers.

          Parents also have to pay to bring an infant on the plane (even a “lap child”. A toddler (over 2) is required to pay full fare. How much “financial burden” does an infant or toddler place on an airline?

        • Apple says:

          When there is turbulence those lap babies can quickly become fun sized projectiles in the cabin.

        • BuySome says:

          Depends..can it substitute for a lunch meal service? Poodle teriyaki?

        • Anthony A. says:

          Apple, they also can puke/crap at a moments notice. At least the dogs are kept in a cage under your seat!

        • 91B20 1stCav (AUS) says:

          ElKay-probably more of an issue of covering constant legal exposure concerning airline slights or failures, real or imagined, visited upon the infants and toddlers and brought to suit by parents…

          may we all find a better day.

        • NBay says:

          MG
          That’s what I call a REAL complaint…..have any others like it?

      • buda atum says:

        That Guatemala Pizza likely cost more than what your average Guatemalan could afford and there customers are likely the top 1% of Guatemalans and wealthy tourist you.

        I should be asking, of course.

  10. just-a-boy says:

    I thought airlines booked all their fuel sales at one time and locked in a set per ton, or per gallon price for the year? Is there info on what time this takes place? and if so what time is it? I Thought they all did this to insulate themselves from short term price spikes….. Sure would suck if it was early March each year….

    • Wolf Richter says:

      just-a-boy,

      It’s much more complicated. Delta has its own refinery in the Atlanta area (its huge hub) and it’s buying crude oil on long-term contracts. Other airlines hedge some of their fuel purchases well into the future, so the initial price spikes don’t hit them full blast. These hedges can turn against the airlines too, and then they disclose how much money they lost on their hedges. Airlines, given the huge amount of fuel they use, are big energy traders.

      • Steve W says:

        While foreign carriers may still be hedging fuel, I think that the US carriers abandoned the strategy because it loses due to contango over the long term.

  11. Ben Sargent says:

    Very interesting take on the stock buyback for what has turned into a difficult business.
    I can’t imagine the cost of running an airline with fuel prices changing hourly due to price manipulation from the trillions of cheap money around the world looking for an empty spot to exploit.
    A fuel surcharge makes sense to me when I saw fuel price at the pump change while I’m waiting in line at a Walmart Brand fuel station. Better than canceling the flight due to no fuel on plane.

    Airline companies are loosing cash money coming from I assume banks and government bailouts.
    For how long ? Then what?

    • phleep says:

      > For how long ? Then what?

      Private reorganizations? Consolidations? Bankruptcies? Then new owners in a more streamlined form.

      We have a vast investment banking industry to do the nuts and bolts.

      But like so many things it has become a jobs program, I think. Maybe there is a wink and a nod between firms and regulators.

      • phleep says:

        I’m no expert but I’ve heard there are extensive setups in the Japanese services industry domestically that are essentially jobs programs, juiced in with certain supports.

        • El Katz says:

          Keeping airlines flying is “A jobs program”

          Wow. Are you out of touch.

        • Fat Chewer says:

          Yeah, same here in Oz. Those supports are known as tax breaks. Effective tax rates for these companies have dropped to zero. In fact, I have heard of companies who pay no tax to begin with getting substantial returns ON TAXES THEY NEVER PAID!

      • COWG says:

        “ Private reorganizations? Consolidations? Bankruptcies? Then new owners in a more streamlined form.”

        That has already happened…

        What you have today is the result of that over the last 40 years…

        Trillions of dollars spent, still broke…

  12. Softtail Rider says:

    Wolf, I’m noticing selective comments without the comment button. Why?

    Jake W

    in any case, those who opposed citizens united largely did so because they wanted their speech, like media and union speech and donations, allowed, while the opposition was silenced.

    I agree with Citizen and this comment. All must have the ability to voice an opinion. We learned this in Civics many years ago.

    Needless to say I’m not always in agreement with our business community but they deserve a voice at the table.

    My main concern is both sides must be truthful and honest. Neither side is, so where do we find common ground?

    My donation for this site is still in my check book as I’m slow and old.

    • Wolf Richter says:

      Softtail Rider,

      “I’m noticing selective comments without the comment button. Why?”

      Comments are “nested” up to 4 deep. That’s how I set it up to avoid the super-thin columns. So the original comment, then a reply to it, then a reply to the reply, and then a reply to the reply to the reply. And that last reply doesn’t have a reply button. If you want to reply to one of those, just reply by using the last reply button above it and address your comment to the commenter you want to reply to.

    • 91B20 1stCav (AUS) says:

      jw/sr-until ‘corps. as people’ are subject to the draft, where their actual, breathing lives are put at stake-just like mine and too many less-fortunate than i was-you’re g-d’d right i’ll back repeal of CU…

      may we all find a better day.

  13. wakarimasen says:

    This massacre comes at a time when Corona restrictions vanish peace by peace and this worldwide.
    So what you could expect were an dramatic increase of the stock prices after 2 years downward pressure and people were not allowed to travel more or less.
    Of course there is Ukraine and the spike in oil price but the people can travel again now more and more after 2 long years and certainly would accept higher ticket prices.
    So the positve for airlines should outweight the negative at all.Earnings by the way upbeat mostly.
    But the opposite happened. During all last trading sessions enormous downward pressure without any relieve.
    Looks like somebody know, no relieve for travel ahead in the near future just with other reason and no Covid anymore.

  14. CreditGB says:

    Inflation is eating the low and middle class alive.
    Travel is now off potential activities list for a large segment of the population.
    Fuel as a component of air travel is huge. It is skyrocketing, no pun here.
    Ticket prices must go up, way up to cover.

    Gee, what might be the outlook for airlines be from this debacle?

    Self destruction by your Government whether by design or out of stupidity, has its costs. These have just started to appear.

  15. Julian says:

    Hang on, I thought Southwest Airlines & Jet Blue were the Low cost airlines?!?

    What is going on?

    • Apple says:

      Not any more. Frontier & Spirit have taken over the low end.

    • BuySome says:

      Get in line…I picture People’s Express still. Flight attendants with card imprinters taking payments in-flight! Surprised they didn’t wear coin changers on a belt. Nothin’ like that $99 red eye L.A to N.Y..

  16. Zark Muckerberg says:

    Hopefully the Bezo rockets will replace this aging industry so I’m looking forward to zip anywhere in the universe in said bus rockets

  17. Swamp Creature says:

    Airline stock have to be the worst investment on the planet. Especially in times like these. Look how many have gone out of business. Eastern Airlines, Pan Am, Braniff, Valujet, Air Florida. A lot more will be going under. You can have em.

  18. breamrod says:

    airline stocks have always been cyclical. You buy them when everyone hates them, the economy is in recession, oil prices are high, etc, etc, and then sell them when everything looks rosy, airports are packed and the airlines are making lots of money. Steel and aluminum too. Problem now is this great reset. Who knows where this leads us.

  19. SpencerG says:

    I have before (and still do ) disagree with Wolf on the issue of stock buybacks in the airline industry. It seemed the smart move at the time in an industry that was consolidating and repairing its balance sheets. The C-Suites of these companies had no way of predicting a once in a century pandemic destroying the industry.

    That said, he is absolutely right about “But the current situation, including the spiking prices for jet fuel, is producing a lot of jitters for airline stocks.”

    The chart showing Wolf’s “My Airlines Index” sees market cap growth stop in February 2021… and plummet starting in April 2021. That almost perfectly corresponds to the Saudis turning off the oil spigots in cooperation with the Russians and OPEC starting in January 2021. As soon as investors realized that oil producers were serious (this time) about driving the price of oil up… they ditched airline stocks en masse.

    • crazytown says:

      Capital intensive businesses should not shred their capital on buybacks.

      • SpencerG says:

        True in most cases. But in ALL cases the shareholders of said companies want a return on their investment. So you either increase your dividend (which is immediately taxable) or buy back your shares. Simply banking the money for a rainy day makes you a target for the Gordon Gekko’s of Wall Street.

        Nor is it like the airlines weren’t reducing their capital expenditures. I am most familiar with Delta… in 2009 they had almost $17 billion in long term debt. By the end of 2016 that was down to $6 billion. For the next three years they stayed roughly at that level while upgrading their planes to more fuel efficient models, completely rehabbing some of their biggest terminals, AND catching their pension plan up (from 49% funded to 74% funded).

        Like I said… I don’t think they should be blamed for not having a Pandemic Crystal Ball… none of the rest of us did either. The airline industry going into 2020 was the healthiest it had been in DECADES… even with the stock buybacks.

  20. Gabby Cat says:

    Shut an entire global down due to the pandemic, stop vacations for almost 2 years, inundated by tax borrowed money to jet the index, and you have a pretty nasty correction. We are seeing that take place. I don’t see big vacations happening anytime soon in this inflation. Most middle income that take okay vacations are scrapping them for food and gas. Who is the biggest lobbyist? That who wins this inflation war.

  21. I would not fly American Airlines for free.

    • Steve W says:

      Why not? Sounds like an interesting story there…

      • Poisoned, not by accident.

        • Steve W says:

          Wow! I have to say, I find it hard to believe that any airline would condone a passenger being poisoned, especially on purpose. I am assuming you mean that you think an employee of American intentionally poisoned you, which, if true, would certainly not be condoned by American (or any other airline).

          Do you have some kind of food allergy that they failed to account for? Or are you saying that some kind of toxin was intentionally introduced into your food? Or, are you saying that you got food poisoning from an inflight meal? If so, that could be the fault of the company that provides the meals rather than the airline.

  22. Seen it all before, Bob says:

    Thank you Wolf!

    It would also be interesting to see how many tickets sold, number of flights, TSA boardings as a function of year.

    Given that I, my entire family, and many friends have not flown in over 2 years for work or vacation due to the pandemic, there is still huge demand to fly to visit family.
    We will likely fly to visit family this summer and they will fly to visit us. LUV is seeing this.
    The company I work for has not allowed business travel until this month. I believe they have vastly reduced overhead costs during this time, but travel by air will increase slowly with much control.

    This is a huge tailwind for airlines.

    The lack of employees, rising oil prices, and if a recession occurs, is a huge headwind. Prices will increase as employee wages rise and oil costs are past along to passengers.

    What really caused the airport overloads and flight delays over the holidays? Rising demand to fly or lack of employees to handle the current load? Or both?

    What will win?

    • Seen it all before, Bob says:

      passed, not past.

    • Wolf Richter says:

      Domestic traffic is about back where it was. International traffic is way down. Leisure travel is up, business travel is down.

      The overall TSA check-point numbers are still down (but they don’t distinguish by type of ticket or flight).

  23. Synergy3000 says:

    Time for another bailout…

    /s

Comments are closed.