NEW YORK – Shares of U.S. airlines recovered somewhat Tuesday after taking a dive Monday on the heels of a deadly American Airlines plane crash in New York.
On Tuesday, officials in the United States said early information suggested Monday's crash was an accident -- and not a terror attack. The crash, which killed up to 269 people, had raised fears another assault had been waged against the United States.
The Standard & Poor's airline index, which fell by 6 percent on Monday, rebounded 4.68 percent. The index had already dropped 43 percent this year.
AMR Corp., the parent of American Airlines, rose 51 cents, or 3 percent, to $17. At one point Monday, AMR shares fell more than 14 percent to their lowest level since 1987.
UAL Corp., the parent of United Airlines, climbed 58 cents to $10.91. Delta Air Lines rose $1.41 to $24.68, or more than 6 percent.
The sector tumbled on Monday as the crash rekindled investors' doubts about the beleaguered industry's ability to recover from the Sept. 11 attacks.
The Airbus A300 crashed into Queens, New York, three minutes after takeoff from John F. Kennedy International Airport. The flight was bound for Santo Domingo, Dominican Republic. Two of the four jets that were hijacked on Sept. 11 were operated by American Airlines.
Despite Tuesday's rebound, many experts say the timing of the crash could hardly have been worse for the industry, which was beginning to see passengers return after the Sept. 11 terrorist attacks.
Brian Harris, an analyst with Salomon Smith Barney, said the crash is likely to lead some passengers to avoid American Airlines for about six months, based on patterns after other recent accidents.
Another attack, analysts said, would strike much deeper fear into travelers, compounding the airline industry's financial problems.
U.S. airlines lost a collective $2.4 billion in the third quarter, even after getting more than $2 billion in federal aid, and were expected to lose upward of $10 billion for the year. They have announced 100,000 layoffs.
Another $3 billion in cash is pending, and carriers also will be eligible for federal loan guarantees.
"This is probably the last thing airlines and online travel companies needed. Consumer confidence was shaky to begin with and this is certainly going to put off any recovery,'' said Jupiter Media Metrix analyst Jared Blank.
Airline industry experts said even if the accident was found to have a mechanical cause rather than human malice, it would not reassure an already skittish flying public.
"It's going to be tough sledding for the industry for a very long time,'' said Michael Friedman, an analyst for American Express Financial Services. "It's no longer a matter of price; it's a matter of people feeling safe. If it was an accident, it's still an awfully bad time.''
Susan Donofrio, an analyst with Deutsche Banc Alex. Brown, said the crash could put a chill on recent gains in airline traffic and even push some smaller carriers, such as America West, out of business.
Surviving airlines also could face higher insurance costs, although there will be a push to have the government pay the increases, as it has since Sept. 11, Donofrio said. Insurance, however, accounts for less than 1 percent of carriers' costs, she added.
Reuters and the Associated Press contributed to this report.