Airline stocks hammered by IATA data

NEW YORK (Reuters) - Airline stocks tumbled on Monday following a forecast by an aviation lobby group that global carriers could lose $9 billion this year due to rising fuel prices and weak demand.

The International Air Transport Association forecast was nearly double its March estimate for an industrywide 2009 loss of $4.7 billion.

The Amex airlines index .XAL fell 3.6 percent in morning trade on the New York Stock Exchange.

"Investors in the airline industry are so sensitive to any new data point that may change the outlook or prospects for recovery," said Majestic Research analyst Matt Jacob, referring to the IATA data.

"Very often those incremental data points can have a big impact in airline valuations even if they do not necessarily represent a big change in forward looking expectations for most investors."

The index's drop came alongside a decline in the broad stock market. Stifel Nicholas analyst Hunter Keay said airline shares in general tend to be volatile.

US Airways (LCC.N) dropped 6.5 percent to $2.72, while American Airlines parent AMR Corp (AMR.N) fell 6.8 percent to $4.68. Continental Airlines (CAL.N) shed 7.8 percent to $9.84, its steepest one-day percentage drop in roughly a month.

The performance of these companies' shares reflects legacy carriers' heightened dependence on business travel, which has been notably weak in recent months, Jacob said.

(Reporting by Deepa Seetharaman; editing by John Wallace)