Most Airline Stocks Slump amid Lower Air Fares

If you’ve noticed that the price of an airline ticket is lower than it used to be, you’ve noticed correctly. In fact, you’re quite right because it is. While airfares have been creeping back up over the last couple of months, they’re still lower than what they were this time last year. As a result, most airline stocks are down in Thursday afternoon’s trading.

The decline in airfares hit most airlines; Delta Air Lines (NYSE:DAL) slipped fractionally but recovered, while United Airlines (NASDAQ:UAL), Southwest Airlines (NYSE:LUV) and Alaska Air (NYSE:ALK) all dropped modestly. Spirit Airlines (NYSE:SAVE) notched up fractionally in Thursday afternoon trading. Based on year-to-year comparisons, airfares in the United States are down 13.4% between September 2023 and September 2022. However, airfares were up 0.3% from August, on top of a 4.9% increase against July. That, in turn, was after an 8.1% drop in July against June and an 8.1% drop in June against May, reports from the Bureau of Transportation Statistics noted.

But all is not lost; Delta reported that its holiday bookings are looking strong, and even at depressed fares, profits are strong enough to brush off higher labor costs. And Alaska Air, meanwhile, has made a shocking development of its own. Those who find the taste of airplane coffee to be bitter and weak will relish a new kind of coffee designed to keep a robust flavor while flying. This specially formulated brew uses a “medium-dark blend” and some added flavors and “complex” tastes that make it better even at higher altitudes.

Which Airlines Are a Good Stock Buy?

Turning to Wall Street, SAVE stock has a Hold rating and offers 9.15% upside potential on its average price target of $17.90. Meanwhile, ALK stock has a Strong Buy rating while also offering 64% upside potential on its average price target of $55.86, as indicated by the graphic below.

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