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Airline investors fly upside down

2 minute read

An American Airlines Boeing 777-300ER plane takes off from Sydney Airport in Sydney, Australia, October 28, 2020. REUTERS/Loren Elliott/File Photo

NEW YORK, Sept 9 (Reuters Breakingviews) - For airline investors, down is up. On Thursday, American Airlines (AAL.O) warned that revenue in the third quarter would fall more than expected as September bookings slowed. Its stock rose 5%. Delta Air Lines (DAL.N), United Airlines (UAL.O), and JetBlue Airways (JBLU.O) all expressed similar sentiment. Each of their stock prices increased.

Until lately, up was down too. Even as vaccinations for Covid-19 have become more widely available and government travel restrictions have lifted, United's share price has fallen around 20%. American’s shares tell a similar story.

The trouble may be that the longer-term future of airlines is becoming harder to predict, so investors are inclined to discount good news and be relieved when the worst-case scenario doesn’t happen. Still a recovery that is further prolonged certainly isn’t first-class . After several quarters of burning cash despite getting costs in check, many airlines swung back to the black last quarter, but just barely . (By Lauren Silva Laughlin)

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Editing by John Foley and Sharon Lam

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