Southwest and American Airlines stocks fall

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By TESTCustomwebLP TESTCustomwebLP May 20, 2015 19:50

Southwest and American Airlines stocks fall

Southwest Airlines plans to increase capacity at speed is concerning analysts and investors, which has impacted its share price. Southwest stated that its plan is to increase capacity by 7-8% compared with 2014, mainly due to adding new flights from Dallas.

The concern from investors is that unless airlines continue to control capacity more tightly, if fuel were to rise over $100 a barrel again, many would struggle to make a profit at current capacity. They are also concerned that any growth in Southwest’s network will impact the rest of the industry by pushing down fares and revenue. Southwest’s shares dropped 2.6% to $41.06 yesterday.

Meanwhile, American Airlines president Scott Kirby has stated that its profit margins will fall next year but will still exceed 2014 levels. American shares dropped 2% yesterday to $48.02.

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By TESTCustomwebLP TESTCustomwebLP May 20, 2015 19:50