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Delta's Upbeat First-Quarter Outlook Lifts U.S. Airline Stocks

Delta's Upbeat First-Quarter Outlook Lifts U.S. Airline Stocks

(Bloomberg) -- U.S. airline stocks got a boost after Delta Air Lines Inc. said its first-quarter results will be better than previously expected, relieving some of the pressure the industry has been under from myriad troubles over the past three months, including the grounding of the 737 Max aircraft.

Delta shares jumped as much as 7 percent Tuesday after its preliminary first-quarter earnings beat analysts’ estimates, and revenue growth exceeded the company’s previous guidance. American Airlines Group Inc. and United Continental Holdings also rallied.

The S&P Supercomposite Airlines Industry Index gained as much as 3.7 percent, the most since January, as the S&P 500 Index slid 0.2 percent. Top gainers on the nine-member airline gauge included Delta, United, Allegiant Travel Co., American, Alaska Air Group Inc. and JetBlue Airways Corp.

Delta's Upbeat First-Quarter Outlook Lifts U.S. Airline Stocks

The past quarter has been rough for airlines as they struggled with the grounding of the Boeing 737 Max jets, rising oil prices, weather troubles, weaker demand for leisure travel and the impact of a prolonged government shutdown. While the industry index has bounced back about 13 percent from the depths of the late 2018 market sell-off, it still remains 13 percent below last year’s high in September.

Credit Suisse analyst Jose Caiado said Delta delivered a “solid beat across the board,” and expected peers American and United to gain on the company’s positive comments about corporate demand.

To contact the reporter on this story: Esha Dey in New York at edey@bloomberg.net

To contact the editors responsible for this story: Brad Olesen at bolesen3@bloomberg.net, Richard Richtmyer

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