Posted on 10/01/2014 11:01:34 AM PDT by blam
Elena Holodny
October 1, 2014
Shares of several major airline companies were trading lower on Wednesday morning after the CDC on Tuesday night confirmed the first case of Ebola in the US.
On Twitter, CNBC's Carl Quintanilla said that traders were blaming Ebola worries on the drop, as CDC officials said the Ebola patient flew from Liberia to Dallas.
On Wednesday morning, shares of Delta, Southwest, United, and American Airlines were all lower. Delta was leading losses, falling as much as 4% while Southwest shares were also weak, falling as much as 3%.
Airline peers United and American were also down about 3%, while the S&P 500 was down 0.5%.
Here's a chart of the decline in Delta this morning:
(snip)
(Excerpt) Read more at businessinsider.com ...
Industrials have been off for a couple weeks now but what we're talking about here is airline stocks and here's how this week's airline sector index is doing:
Down 5% today. Sounds dramatic but that index has a regular habit of making those kinds of jumps w/o ebola, and airline stocks have been a darn good buy for a couple years now:
And this will get worse. Much worse before it gets better.
We have already cancelled our Thanksgiving travel plans by air and probably by car as well.
We will exercise an abundance of caution until we are convinced it is unnecessary.
Part of the reason is that the airlines do business in a manner that is antagonistic to their customers.
1. If there’s 300 people on a flight you’ll be hard pressed to find two of them who paid the same total amount for their flight. Even on Southwest.
2. When an airline sells enough seats to cover their costs they RAISE the price on the remaining seats.
3. When you need a last-minute ticket due to a family emergency you can expect to pay two-to-five times the standard rate for the ticket.
4. They charge fees for EVERYTHING.
5. They excel at losing your luggage to the point that a close friend of mine sends her stuff Federal Express to make sure it gets there.
&etc.
A big thanks to the Gods over at the CDC....
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