Airline stocks are rising Wednesday in sympathy with United Airlines, after the carrier issued fourth-quarter revenue guidance above analyst estimates.
- Airline stocks are shares are powering higher. What’s behind the gains?
Airline Stocks Rise After United Guides Q4 Revenue Higher
United Airlines Holdings Inc (NASDAQ:UAL) is projecting more fourth-quarter revenue than Wall Street had penciled in. The carrier sees sales above approximately $18.48 billion, while analysts had modeled roughly $18.29 billion. It also forecasts faster unit revenue growth than in the third quarter and a slower rise in unit costs outside fuel. Together, those signals point to demand for air travel that is stronger than expected.
Other carriers are moving with United. Shares of Delta Air Lines Inc (NYSE:DAL), American Airlines Group Inc (NASDAQ:AAL), Southwest Airlines Co (NYSE:LUV) and Frontier Group Holdings Inc (NASDAQ:ULCC) are all trading higher.
Tuesday’s trading gave all five carriers a head start. A 1% slide in crude futures, to below $97 a barrel, helped them. Trading Economics tied the drop to an unverified report that Qatar and Pakistan had proposed reviving talks to end the Iran conflict. Cheaper crude helps airlines quickly, since fuel ranks among their largest costs.
United Airlines is one of the industry’s largest carriers, so its results act as a read on the whole sector. Two questions drive that read: do travelers still pay up for premium seats, and can airlines push rising costs onto customers? A confident outlook from United Airlines therefore signals lasting demand and pricing power that its peers may share.
Airline Stocks Are Moving Higher
Price Action: Frontier shares were up 6.33% at $5.21, United Airlines shares were up 6.88% at $104.50, American Airlines shares were up 3.80% at $12.57, Southwest shares were up 2.57% at $40.67 and Delta shares were up 3.22% at $79.13 at the time of publication on Wednesday, according to Benzinga Pro.
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