Airlines lead S&P 500 rally after laying out path to profit

Airlines lead S&P 500 rally after laying out path to profit

Aviation















Bloomberg

US airline stocks jumped the most in the S&P 500 Index after carriers said they will trim flying to remain on track toward profits even as fuel prices rise.

Several of the largest carriers, including United Airlines Holdings Inc and American Airlines Group Inc, cut their capacity forecasts for the first quarter, while Delta Air Lines Inc held growth to the low end of a previous range, according to regulatory filings. Many simultaneously boosted their revenue expectations,

citing surging travel demand in the wake of waning coronavirus infections.

The capacity moves may help ease investor concerns over the impact of higher fuel costs as the industry looks to recover from a pandemic slump. The jump in oil prices — particularly after Russia’s attack on Ukraine — is pressuring margins for an industry that’s still struggling for profits, forcing airlines to tighten the supply of available seats in response.

United is seeing “unprecedented leisure demand,” Andrew Nocella, the airline’s chief commercial officer, said at a JPMorgan Chase investor conference. “People want to get back out. Business traffic is booming, although we still have a long way to go.”

Fuel prices, one