It should be the best of times for U.S. airlines with a travel boom still going strong, but investors are nervous demand may soften as the economy falters, making it harder to protect profits from soaring costs.
Those concerns are battering airline stocks even as earnings reports point to a continuing consumer appetite for travel. Shares of United Airlines fell about 10% on Wednesday, dragging down the broader the NYSE Arca Airline index, after the Chicago-based carrier forecast lower-than-expected fourth-quarter profit on rising expenses.
"It's really a demand-driven business" said Brian Mulberry, client portfolio manager at Zacks Investment Management. "If there's less demand, then obviously less sales means less profitability."
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.