Airlines stocks just hit major turbulence, with American Airlines (AMR) shares suffering a 33% fall on Monday.
In a harrowing day for the air travel industry, an index of 15 major airline shares tumbled 9.8%. The index is now down 41% this year – that compares harshly with a 12.6% drop for the Standard & Poor’s 500 index.
It was American Airlines stock plummeted the furthest – from $2.96 to $1.98 in a single day. A report has suggested the drop is down to a decreased demand for air travel (with a particularly terrible August) and a higher number of pilots retiring early. American Airlines may now consider filing for bankruptcy.
AMR was far from the only struggler, however. US Airways Group Inc. shares slipped 15.8%, while JetBlue Airways Corp. lost 14.7%.
Naturally, it seems AMR is against the idea of filing for bankruptcy. Spokesman Andrew Backover had this to say:
“Regarding rumors and speculation about a court-supervised restructuring, that is certainly not our goal or our preference. We know we need to improve our results, and we are keenly focused as we work to achieve that.”
American Airlines was the only major North American carrier not to file for bankruptcy in the decade following the September 11th attacks. Airline stocks have been gradually falling over the last five trading days, with AMR shares dropping 40% over that period.
Yet it was only in July that the 81-year-old company placed an order with Boeing Co. for 460 narrow-body planes – the biggest single order in aviation history.