Airline stocks shares fall on American's so-so 1Q outlook
Shares of airlines have fallen after American issued a lackluster first-quarter outlook and said profit could be below Wall Street expectations
FORT WORTH, Texas (AP) — Airline stocks tumbled Wednesday after American Airlines issued a lackluster outlook that appeared to amplify fears that travel demand, which has surged for the past year, could finally be slowing in the face of inflation and economic uncertainty.
American said it expects to report a small profit for the first quarter, but one that could easily be below Wall Street expectations.
American indicated that demand is still about as strong as it predicted in January, but the stay-the-course update came as analysts cautioned investors about a slowdown in travel bookings.
Bank of America analyst Andrew Didora said this week that his bank's data shows that airline bookings have slowed by 4% since mid-March, “and we have become a bit more cautious" about revenue in the April-through-June period. He lowered second-quarter revenue estimates for the big airlines by up to 2%.
