| Sept 3
Sept 3 U.S. airlines stocks fell on Wednesday
after Delta Air Lines trimmed its operating margin
forecast and reported that international passenger traffic
lagged slightly in August, heightening concerns that other U.S.
carriers might encounter similar headwinds.
While Delta's August performance was relatively robust,
Delta shares were down 5.2 percent at $38.79 in midday trading
Wednesday on the New York Stock Exchange. American Airlines
Group Inc shares were down 3.3 percent at $39.16 on the
Nasdaq, United Continental Holdings stock fell about 2.3
percent at $48.83.
"It's still a very strong performance," said CRT Capital
Group analyst Michael Derchin. "The market tends to overreact."
At a conference organized by Cowen and Co on Wednesday,
Delta said it expected operating margins of 15 percent to 16
percent in the third quarter, down from guidance of 15 percent
to 17 percent it gave in July.
Analysts said the change likely stemmed from Delta's
notching down its passenger unit revenue forecast to 2 percent
to 3 percent growth in the third quarter from 2 percent to 4
percent growth forecast earlier.
Separately, the Atlanta-based airline said it filled only
88.7 percent of its seats on transatlantic flights this August,
compared with 91.5 percent last year. Its U.S. load factor rose,
however, to 87.2 percent from 85.3 percent a year earlier.
Other U.S. carriers have yet to announce August traffic, and
concern about empty seats on flights across the Atlantic and to
Latin America may be putting pressure on their performance, said
Stifel Nicolaus analyst Joseph DeNardi.
"[There is] excess capacity in the international market," he
Some investors also may be apprehensive about the impact
that the Ebola virus and Middle East tension could have on air
travel, Derchin said.
(Reporting By Jeffrey Dastin; Editing by Alwyn Scott and Gunna