The Israel-Hamas conflict has resulted in a profit warning from United Airlines (NASDAQ:UAL), leading to a significant drop in airline stocks on Wednesday. The warning affected the U.S. Global Jets ETF JETS, S&P 500 index SPX, and Dow Jones Transportation Average. This was further compounded by a surge in crude oil prices by 1.7%, which added to investor concerns.
United Airlines saw its stock plunge by 8% due to a pessimistic Q4 forecast that is linked to suspensions of flights to Tel Aviv. This comes despite the company surpassing Q3 profit expectations, setting the stock on course for a one-year closing low.
Helane Becker, an analyst at TD (TSX:TD) Cowen, predicts continued losses for United in Q4. The fallout from the ongoing conflict has also impacted other airlines. Stocks of Delta, American Airlines (NASDAQ:AAL), JetBlue Airways (NASDAQ:JBLU), Southwest Airlines (NYSE:LUV), Hawaiian Airlines parent Hawaiian Holdings (NASDAQ:HA) Inc., Alaska Air (NYSE:ALK) Group Inc., and Spirit Airlines (NYSE:SAVE) Inc. all experienced downturns.
Despite the crisis in Israel, Delta President Glen Hauenstein expressed confidence in meeting full-year guidance. The situation is further complicated by a recent blast at a Gaza hospital that has heightened tensions and uncertainty. Investors are now keenly awaiting upcoming results from American Airlines.
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