HONOLULU (HawaiiNewsNow) - United stock is down 2 points despite reporting much higher revenues and profits. Southwest Airlines is also down 2 points. American and Delta are down by smaller amounts, and Hawaiian is down fractionally. And why is that?
United scared stock traders by announcing plans to aggressive expand capacity - more flights, more seats, 4% to 6% more seats, enough to maybe trigger a fare war. Analysts, frantically scribbling on their napkins, concluded that, all other things being equal, per share profits at all these airlines could fall 4%.
The real scare is that all things won't be equal. What if some airlines hold onto their market share but the stock YOU hold loses more than 4% of its per share earnings? So that's why lower fares, which would be good for consumers, have given the market the vapors.