On Wednesday, after American Airlines announced a wider first-quarter loss because of “lingering weakness in the economy combined with rising fuel prices”, Airline stocks took a severe dive.
This created a greater fear in investors that the revenue recovery among airlines will not be increasing quickly.
In the lead of the decline was American Airlines parent AMR Corp. The Fort Worth, Texas-based airline announced a larger than expected loss as fuel costs jumped 14% more than offsetting an increase in average ticket prices.
“To say the year has gotten off to a challenging start is, of course, an understatement,” stated Chairman and Chief Executive of AMR in a letter to employees.
“That disappointing result, which was driven by lingering weakness in the economy combined with rising fuel prices, underscores the reality that, despite a lot of hard work and progress, we remain regrettably far from our goal of sustained profitability,” the Chairman stated.
Source: Market Watch