Cold and snowfall in the US pulls airline shares on the stock market

The frost in the United States has not only caused the cancellation of thousands of flights in recent days, but also the fall in the shares of airlines.

Since the cold began to hit that country, the papers of four airlines from the United States and one from Mexico have fallen between 3 and almost 11%, which represents a joint loss of 3.734 million dollars in market value, in less than a week.

The issuer most affected in its listing on the New York Stock Exchange is Southwest Airlines, a low-cost US airline based in Dallas, Texas.

In three sessions, it has erased 2.315 million dollars of value on the Stock Market, after its shares accumulate a drop of 10.81%, to 32.19 dollars, from December 26 to 28.

Other US firms affected by the cancellation of flights due to extreme winter weather are Delta Airlines, their papers have fallen 3.53%; those of American Airlines, 3.07%; and those of United Airlines, 2.87 percent. While the price of its Volaris titles, the low-cost Mexican company, has fallen 5.77%, in the same period.

“The fall in the shares of the airlines, mainly those of the United States, has to do with the frosts that have led to the cancellation of thousands of flights, which will negatively affect their income because they have to make refunds and other type of compensation”, explained the director of financial analysis at Black Wallstreet Capital (BWC), Jacobo Rodríguez.

There are already 7,811 flights to, from and within the United States, those that have been canceled since December 27 and those scheduled for the 29th and 30th of the month, show data from the FlightAware flight website.

On Monday alone, more than 2,500 canceled flights and more than 7,500 airport delays were reported. To these are added the more than 3,000 last weekend, according to reports from the Flightradar24 website.

The manager at BWC explained that this issue disrupted the markets because it occurred in a season of high demand for airlines due to the year-end holidays.

Being one of the largest frosts in recent years in the United States, it confirms the risk that weather events pose for businesses, such as travel.

The losses in the stock market were extended in the session on Wednesday. JetBlue Airways share price fell 2.98% on Nasdaq; while on the New York Stock Exchange, the shares of Delta Air Lines fell 2.77%; those of American Airlines yielded 1.68% and those of United Airlines 2.58 percent.

While the most impacted yesterday was Southwest Airlines, with a fall of 5.16 percent. This airline is the second largest in 23 of the top 25 US travel markets.

“With more than half of the airports we operate in the United States under pressure from the storm, Southwest is affected by our size and structure,” the airline said in a statement Tuesday.

For its part, Volaris fell 5.33 on the Mexican Stock Exchange (BMV). Air terminal operators in Mexico also posted losses on Wednesday. The share of Grupo Aeroportuario del Sureste fell 2.91%; that of the Grupo Aeroportuario del Pacífico, 2.24% and that of the Grupo Aeroportuario del Centro Norte, 0.72 percent.

Jacobo Rodríguez recalled that the airlines had been recovering from the closures due to the Covid-19 pandemic and the pressures caused by the rise in fuel prices.

judith.santiago@eleconomista.mx