While the easing of travel restrictions with continued progress on the vaccination front is helping the airline industry generate increased passenger traffic, rising fuel prices have fostered concerns about airlines’ profitability. With these concerns in mind, analysts have downgraded Delta Air Lines (NYSE:DAL), American Airlines (NASDAQ:AAL), JetBlue Airways (NASDAQ:JBLU), Allegiant Travel (ALGT), and Hawaiian Holdings (NASDAQ:HA). So, we think these stocks are best avoided now. Let’s discuss these names.Despite witnessing a limited recovery in the first half of the year, the resurgence of COVID-19 cases, followed by stricter travel restrictions, have stymied new bookings and increased cancellations of existing bookings. Although the industry is again seeing an uptick in passenger traffic with the easing of travel restrictions in various countries, analysts expect rising fuel costs and pressure on fares to result in bottom-line stress in the fourth quarter and beyond for most airlines.
Although major airline operators should stay afloat owing to their efforts in switching to sustainable jet fuel, some could struggle.
Thus, fundamentally weak airline stocks Delta Air Lines, Inc. (DAL), American Airlines Group Inc. (AAL), JetBlue Airways Corporation (JBLU), Allegiant Travel Company (NASDAQ:ALGT), and Hawaiian Holdings, Inc. (HA) have lately been downgraded by analysts, and we think these stocks are best avoided for now.