Airline Stocks Hit By Record Cancellations: Why This Isn't As Bad As It Looks
Summary
American Airlines faced the highest cancellation rates from recent winter storms, with a projected Q1 revenue hit of 1.5%.
JetBlue and regional carriers also experienced elevated cancellations, but expect minimal full-year financial impact due to contract structures and limited exposure.
The US Global Jets ETF underperformed the market, but share price declines in AAL and JetBlue partly reflect earnings releases, not just weather disruptions.
Despite Q1 weather-related pressures, I see no major valuation or performance concerns for airline stocks, as Q1 is seasonally soft and disruptions are anticipated.
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As major parts of the US have been plagued by winter storms, many airline flights have been cancelled. On Sunday, the peak was reached, marking the highest number of cancellations since the pandemic. In this report, I have
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This article was written by
Dhierin-Perkash Bechai is an aerospace, defense and airline analyst. Dhierin runs the investing group The Aerospace Forum, whose goal is to discover investment opportunities in the aerospace, defense and airline industry. With a background in aerospace engineering, he provides analysis of a complex industry with significant growth prospects, and offers context to developments as they occur, describing how they might affect investment theses. His investing ideas are driven by data informed analysis. The investing group also provides direct access to data analytics monitors. Learn more.
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