Airline stocks drop as Hamas' attack in Israel hurts travel plans, raises fuel-cost concerns

By Tomi Kilgore

Delta Air Lines says 'security situation' in Israel may affect travel to, from and through the area

Shares of airline companies were in broad decline Monday, with some falling to levels not seen in more than a decade in the wake of Hamas' attack on Israel.

Besides the reduced travel to the region as a result of the military conflict, oil prices have also spiked up as a result, at a time when investors have grown concerned over how rising fuel costs would reduce profits and could cut into leisure travel.

The U.S. Global Jets ETF (JETS) shed 3.6% in morning trading toward a one-year low, and the Dow Jones Transportation Average DJT dropped 0.5%, with the index's decliners led by all six of the airline components.

Meanwhile, crude oil futures (CL.1) jumped 4.6%, after falling 11.6% over a seven-session stretch through Friday.

Read: There's one culprit for U.S. airlines' steeper losses, and it's not a lack of demand.

Delta Air Lines Inc.'s (DAL) stock took a 6.1% hit toward a five-month low, ahead of the air carrier's third-quarter results due out later this week.

The air carrier said that the current security in Israel "may impact travel" to, from and through Tel Aviv, Israel through Oct. 14.

Delta is slated to report results on Oct. 12, before the market opens. The FactSet consensus for earnings per share is $1.96, which is down from $2.04 at the end of September and from $2.33 at the end of August.

In mid-September, Delta joined its peers by cutting its profit outlook, while raising its estimate for fuel costs per gallon.

Shares of American Airlines Group Inc. (AAL) slumped 5.6% toward a one-year low, after the carrier's pilots' union recommended its members refuse to fly to Israel, as the Associated Press reported.

The company is expected to report third-quarter results on Oct. 19, which is a little more than a month after it provided a downbeat profit outlook.

United Airlines Holdings Inc. shares (UAL) descended 5.6% toward a nine-month low, a little more than a week ahead of its third-quarter report.

Elsewhere, shares of JetBlue Airways Corp. (JBLU) slid 6.5%, to trade at the 11-year closing low price of $4.39 that was hit on Sept. 26.

Southwest Airlines Co.'s stock (LUV) gave up 3.5% and Alaska Air Group Inc.'s stock (ALK) was down 4.3%, with both headed for the lowest closes since May 2022.

Shares of Hawaiian Holdings Inc. (HA), the parent of Hawaiian Airlines, declined 6.0%, toward their first sub-$5 close since April 2012.

-Tomi Kilgore

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10-09-23 1103ET

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