On November 13, 2015 the third Friday the 13th of the year, Paris was attacked as terrorist killed more than 120 people throughout the city and critically injured even more. France has stated that they will go to any length to hit back at the terrorist that attacked Paris and that the country is at war. The event is similar in many ways to the events that occurred in the United States where terrorist took down the World Trade Center, which generated fear quickly undermined the travel business as investors quickly exited airline stocks.
Airlines have been enjoying declining jet fuel prices, and the fundamentals surrounding their business appear to be robust. Most are changing their business model to be in the mode of Spirit Air which charges for options such as carryon bags and on board snacks.
Unfortunately air travel is susceptible to fear. Terrorist activity has focused on airline activity in the past as seen in 2001. Although Homeland security is very well trained to search for unusual activity, it cannot ease the fear of the casual traveler.
Airline stocks were hammered hard in 2011, as seen in the graph below. The airline index consolidated initially following the 2001 attacks but then tumbled more than 40% in less than a week. The question for invests given the current economic backdrop is will history repeat itself? Most major airlines are lower on the trading session with Delta Air Lines Inc (N:DAL), United Aircraft Corporation OAO (MCX:UNAC) and American Airlines Group (O:AAL) down nearly 2%.