American and Southwest report disappointing monthly figures; airline stocks sink again

Published May 03, 2016

Airlines stocks are down again after disappointing monthly reports from American and Southwest, which suggests that airlines are losing the ability to raise prices.

American lowered its second-quarter forecasts for a key revenue figure and pretax margins on Tuesday.

Southwest says that same key revenue number fell 6 percent in May, and CEO Gary Kelly says the airline is beginning to scale back its planned flying in the second half of the year because the economy is weaker than expected.

The reports added to concern that the airlines may be adding flights faster than the pace of travel demand.

In morning trading, shares of American, Southwest, United and Delta are all down about 3 percent to 5 percent.

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