Airlines suffered before July Fourth; Stocks fell


Flight disruptions piled up at airports around the country ahead of the July Fourth weekend, but airline investors have largely shrugged them off.

More than 63,000 flights operated by U.S. airlines, or 30% of their schedules, were delayed between June 24 through July 2. More than 9,000, or 4.2%, were canceled. Both of those percentages are above disruption averages so far this year, according to flight-tracking site FlightAware.

On Tuesday, disruptions lessened with nearly 2,500 U.S. flight delays, half the number that were delayed on Monday, though thunderstorms continued to disrupt flights at major airports like Newark and Denver.

The recent delays were driven mostly by a series of rolling storms coupled with other issues like a shortage of air traffic controllers in congested airspace around New York and other areas, derailing travel plans of thousands of customers. It upended what has been a mostly calm spring for travelers.

But sky-high travel demand continues to keep airline stocks aloft, with several reaching multi-year highs. The Transportation Security Administration said it screened nearly 2.9 million people on Sunday, a record for a single day. It’s the clearest sign yet of unrelenting demand for air travel, as passengers book flights or cash in on rewards points and make up for lost time after the Covid pandemic halted trips.

American Airlines and Delta Air Lines have recently raised their profit outlooks thanks to strong bookings. Lower fuel prices from last year continue to be a tailwind for the industry, too. Airlines release second-quarter results and will offer a full-summer outlook starting in mid-July, reports that will likely include the financial impact of the late June and early July disruptions.

Airline stocks rise

Major U.S. carriers’ stock gains this year are far outpacing the broader market. United Airlines and Delta are each up 46% so far this year through Monday, while American Airlines is up 42%. For comparison, the S&P 500 has gained 16% over the same period. Delta and United recently touched their highest levels since June 2021. Southwest Airlines, whose 2022 year-end meltdown drove it to a first-quarter loss, is up 10% this year.

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