Seaport Global Downgrades These Airline Stocks Citing ‘Energy Market Chaos’

Seaport Global Downgrades These Airline Stocks Citing ‘Energy Market Chaos’

Seaport Global analyst Daniel McKenzie downgraded certain companies in the Airlines sector. McKenzie cites "energy market chaos" tied to the Russian/Ukraine war and calls it a "weaker balance sheet story" as the reason behind the downgrade.

The analyst mentions airlines likely need to begin planning for a worse oil shock. Although pent-up demand "remains great," airlines likely need to cut roughly 10%-15% of capacity from 2022 plans to "gain the kind of pricing power needed to offset the worse oil shock."

Related: Airlines Depend On Hedging, Fuel Surcharges As Oil Surges: Report