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President Trump’s Travel Ban Hits Airlines: Latest Reports on Delta Air Lines and American Airlines

January 31st, 2017 – The airlines industry continued to fall Monday as investors feared protests over President’s Trump recent travel ban could curb demand for flights and potentially lead to more travel restrictions. The NYSE Arca Airline Index dropped 1.78 percent to close at 108.48. The Index has fallen approximately 5.03 percent since December 20th, when it closed at nearly a 15 year high.

“Should you see it spread or more stringent restrictions on travel into the U.S. be enforced, that’s the concern,” said Joe DeNardi, an analyst with Stifel Financial Corp., in an interview according to Bloomberg.

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On Friday, President Trump signed an executive order that indefinitely bans Syrian refuges from entering the country and suspends the broader refugee program for four months. The order also temporarily bans people from Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen from entering the U.S. for 90 days.

Delta Air Lines, Inc. (NYSE:DAL)

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Delta Air Lines’ shares dropped 4.08 percent to close at $47.67 a share Monday. The stock traded between $47.54 and $48.95 on volume of 12.75 million shares traded. A number of Delta Air Lines’ flights were cancelled over the weekend due to a computer glitch. Roughly 170 of the company 5,200 daily flights were cancelled on Sunday and an additional 110 flights were cancelled on Monday.

The company reported operating revenues were $9.46 billion for the fourth quarter of 2016, compared to $9.50 billion for the fourth quarter of 2015. The company reported earnings of $622 million or $0.84 a share for the fourth quarter of 2016 against earnings of $980 million or $1.25 a share reported in same quarter year ago. As the company earned $0.82 a share on adjusted basis, average analysts’ estimates had called for adjusted earnings of $0.82 a share on revenues of $9.41 billion, according to Thomson Reuters I/B/E/S.

American Airlines Group Inc. (NASDAQ:AAL)

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American Airlines’ shares fell 4.37 percent to close at $44.90 a share Monday. The stock traded between $43.86 and $45.92 on volume of 16.79 million shares traded. The company reported revenue of $9.79 billion for the fourth quarter of 2016, company to $9.63 billion in the fourth quarter of 2015 and above consensus estimates of $9.75 billion, according to FactSet. Adjusted earnings per diluted share were $1.48 for the fourth quarter of 2016, down from $2.00 per diluted share in the fourth quarter of 2015.

“Our product investments are showing up in our unit revenue performance. We had the largest improvement in unit revenue among our competitors and as we look forward, we continue to see strong demand for air service, and improving yields.” said Doug Parker, Chairman and CEO.

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