U.S. carriers under pressure after Virgin Atlantic sees slowdown in U.S. to UK travel
Seeking Alpha News (Mon, 31-Mar 8:13 AM)
Airline stocks are facing renewed pressure on Monday after Virgin Atlantic’s CFO cautioned about a slowdown in U.S.-to-UK travel, citing “general consumer uncertainty” among American travelers.
“When we say signals of a slowdown in demand…we’ve had weeks where it’s been flat, we’ve had weeks where it’s been negative,” said Virgin Atlantic CFO Oli Byers to reporters, according to Reuters.
Although Byers attributes the change in traffic to reluctant American consumers given uncertainties with the economy, it comes after a very strong start to the year for the British carrier.
Travel out of the UK to the U.S., however, remains “pretty strong,” Byers added, with corporate demand being “very robust and growing significantly.”
Stocks of U.S. carriers have been trending lower for most of the last several weeks amid a series of bad news starting with Delta’s (NYSE:DAL) guidance warning, a drop in bookings for U.S. carriers between Canada and the U.S., and worsening consumer sentiment. As a result, over the last month, shares of Delta Air Lines (NYSE:DAL) were down 27%, American Airlines (NASDAQ:AAL) and United Airlines (NASDAQ:UAL) both down 25% versus -6% for the S&P 500. All three are expected to trade in the red for a fifth consecutive day.
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