Airline Stocks Sputter as Flight Cancellations Ramp Up

Both stocks are heading toward modest year-to-date losses

Deputy Editor
Dec 27, 2022 at 10:17 AM
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After initially rising in premarket trading, Delta Air Lines, Inc. (NYSE:DAL), and American Airlines Group Inc (NASDAQ:AAL) are both down 1.3% this morning. This drop in the airline sector comes after Southwest Airlines (LUV) cancelled thousands of flights amid harsh winter weather across the U.S. As of this morning, airlines in the U.S. have cancelled more than 5,000 flights for Tuesday and Wednesday. 

Delta Air Lines stock is digging slightly deeper into its roughly 16% year-to-date deficit. While the shares are up 17% this quarter, their 320-day moving average stifled a rally on Dec. 5.

American Airlines stock is heading towards a steeper 30.2% year-to-date deficit. The equity's 200-day moving average kept a lid on breakout attempts over the last two months, though a floor could be emerging at the $12 level.

There's a stark contrast to how analysts view each stock. For Delta, 14 out of the 15 analysts rate the stock a "strong buy." For American, 12 of the 13 rate the equity a "hold" or worse. 

What both stocks have in common is low volatility expectations. This is per AAL and DAL's Schaeffer’s Volatility Scorecards (SVS) of 3 and 26, respectively. In other words, these stocks look like optimal candidates for premium sellers



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