What Just Happened to Airlines?

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Delta Air Lines (DAL) got a mention on yesterday’s Market Action segment, and today it’s hitting turbulence.

Sure, management announced that it carried a record 15.2 million passengers in September. It also set new high-water marks in July and August. While that’s positive for earnings, other forces caused a down draft.

First, higher fuel costs threaten profitability. Oil prices rose in the third quarter and have reached their highest level since 2014.

Second, the weather is a problem. First you had Hurricane Florence, and now Michael is bearing down on Florida. In addition to grounding flights, that will force the company to waive cancellation and re-booking fees.

In conclusion, the economy is strong and airlines have enjoyed good traffic. But other forces are dragging them down.

Delta Air Lines (DAL), with 50-day moving average.
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Dr. Don Pratl is Director of Trader Development and Education for TradeStation. He joined TradeStation in 2016 after holding similar roles with other online brokerages. Don’s long career in the financial services industry reflects expertise in administering trading and investment strategy programs for retail investors as well as financial services professionals. Since the 1980s, he has held various positions in areas including CBOE trading floor order execution, marketing, sales, personnel management, training and customer service. Don holds series 3, 4, 7 and 63 FINRA licenses, earned his Ph.D. in Organization and Management, and his M.A. and B.A. in Political Science. He has been an occasional adjunct college instructor since 2004 at a range of institutions, teaching undergraduate, graduate and doctoral students using in-class and online formats.