It's been a tough month for shares of airline companies.
The NYSE Arca Airline index, which tracks the performance of major American and overseas airlines, has slid 15% so far this month, underperforming the benchmark S&P 500 index, which is down 0.6%.
Here's why investors are getting out of airline stocks.
Boeing's "can of worms": Boeing's problems began on Jan. 5, when the door plug on an Alaska Airlines Boeing 737 Max 9 detached mid-flight.
The fallout from the incident has spread across the airline industry. Hundreds of flights have been canceled. A class action lawsuit was filed on Jan. 11 in Washington state against Boeing on behalf of the Alaska Airlines passengers. The US Federal Aviation Administration and National Transportation Safety Board are investigating.
Then, Wells Fargo analysts on Tuesday downgraded Boeing to "equal weight" from "overweight," which is the equivalent of a "buy" rating, citing concerns that the FAA's investigation of the aircraft manufacturer could reveal some damning findings.
"Given Boeing's recent track record, and greater incentive for the FAA to find problems, we think the odds of a clean audit are low," the analysts wrote. "The FAA's audit is limited to Max 9 for now, but it's feasible that findings could expand the scope to other Max models sharing common parts."
Shares of Boeing have fallen 22% this month.
Spirit Airlines and JetBlue's blocked merger: Spirit Airlines shares took a hit on Tuesday after a federal judge in Boston ruled against JetBlue's proposed $3.8 billion acquisition of the discount airline.
Both airlines said they disagree with the ruling.
"We are reviewing the court's decision and are evaluating our next steps as part of the legal process," JetBlue and Spirit said in a joint emailed statement to CNN.
Spirit Airlines shares have tanked about 63% this month. JetBlue shares rose following the ruling, but are still down about 16% for the month.
The US Justice Department sued in March to stop the deal, the first time in more than 20 years that the government has sought to block a US airline merger.
Some investors appear worried about another proposed US airline merger: the $1.9 billion deal to combine Alaska Airlines and Hawaiian Airlines. Shares of Hawaiian Holdings have slipped about 5% this month.
Oil prices are volatile: Investors are also concerned about a possible spike in oil prices. Crude prices jumped briefly after US-led strikes on Iran-backed Houthi targets in Yemen after repeated attacks on commercial shipping in the Red Sea raised concerns about a broader conflict that could curtail oil supply from the Middle East.
But Brent crude futures, the global benchmark for oil, settled back at $77.88 a barrel on Wednesday. West Texas Intermediate crude futures, the US benchmark, settled at $72.56 a barrel. Both are down over the past month.
The read-through to airline stocks? In the event of further escalation of the conflict in the Middle East, higher oil prices could push up the price of fuel, eating into airline companies' bottom lines.
Earnings warnings: Delta Air Lines last Friday beat Wall Street expectations for its latest quarter but worried investors when it trimmed its 2024 earnings outlook. The company projected adjusted earnings between $6 and $7 per share for the year, down from the more than $7 it previously forecast.
The company also said that it continues to see supply chain issues stemming from global disruptions during the onset of the Covid pandemic, particularly with securing parts and repairs.
"All the suppliers in our industry lost a tremendous amount of experience due to the pandemic and have taken time to get that back," CEO Ed Bastian said Friday on the company's earnings call.
Delta shares declined following the release of its earnings and are down about 8% for the month to date. Other major carriers' stocks followed suit. United Airlines Holdings shares have declined 8% so far in January and American Airlines Group shares have fallen 6%.
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