Delta Air Lines, Inc. (DAL), Southwest Airlines Co. (LUV), March Was a Month to Forget for Airlines

United will have a harder time posting strong revenue growth this month. In fact, United (along with US Airways) has high market share in the Washington, D.C., area, so it is likely to see an outsized impact from government travel budget cuts. Investors should therefore watch for any comments made by United’s management about booking and revenue trends on the company’s earnings call later this month.

Foolish bottom line
Investors drove airline stocks to 52-week highs during Q1, but bad news has piled up fast in the last two weeks. For the moment, investors should probably take a “wait-and-see” approach to most airline stocks, as airline management teams have quickly lost their confidence in the demand environment. I am particularly skeptical that United will be able to continue its relative outperformance in April and beyond.

The article March Was a Month to Forget for Airlines originally appeared on

Adam Levine-Weinberg is short shares of United Continental Holdings (NYSE:UAL) and is long Sep 2013 $33 Puts on United Continental Holdings. The Motley Fool recommends Southwest Airlines.

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