Airline inventory news: Why are DAL, UAL, AAL and LUV inventories up today?

Airline shares jump today after Delta Airlines (NYSE:LAD) reported strong first quarter results and provided a positive outlook.

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Shares of American airlines (NASDAQ:AAL), South West Airlines (NYSE:LUV) and United Airlines (NASDAQ:LAU) are each up today after Delta’s first-quarter results came in stronger than expected and the company reported flight bookings were up this year.

What happened with airline stocks

In announcing its first quarter results, Delta Airlines said it expects a return to profitability in the current second quarter as flight bookings increase sharply from a year earlier. Delta, based in Atlanta, Georgia, expects second-quarter capacity to reach 84% of 2019 pre-pandemic levels.

This news sent DAL stock up 4% today to $40.30 per share. Year-to-date, Delta Airlines stock is down 4% as post-pandemic airline recovery remains uncertain, with subsequent waves and new variants of the disease weighing on consumer travel intentions .

For the first quarter of this year, Delta Airlines posted a net loss of $940 million on revenue of $9.35 billion, above the $8.92 billion in revenue expected by Wall Street. Delta said rising fuel costs dragged its first-quarter results, noting that its fuel bill rose 6% from 2019 to $2.09 billion, even though capacity was down by 17%.

Airline fuel prices have risen more than 50% since the start of this year.

why is it important

Airlines and their stocks have been punished since the start of the Covid-19 pandemic in 2020. The International Air Transport Association (IATA) estimates that airlines around the world have collectively lost $200 billion during the pandemic as demand for travel plummeted.

The NYSE Arca Airline Index has fallen nearly 30% over the past year as stocks of major carriers have fallen on negative investor sentiment. Delta’s outlook provides a much-needed boost of confidence to the entire airline industry, which is why airline stocks are up across the board today.

And after

Airline stocks are rebounding today after Delta’s first quarter release. The duration of the upward trend will depend on the results and advice provided by the other major US carriers. If other airlines such as American and United provide equally strong guidance in the coming weeks, it could be the start of a significant rally in airline stocks.

As of the date of publication, Joel Baglole had no position (directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.

Joel Baglole has been a business journalist for 20 years. He spent five years as a reporter for the Wall Street Journal and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.