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View Full Version : CAL down 17%?

08-15-2007, 12:36 PM
I see how the airline stocks got hit pretty hard today, CAL in particular. I couldn't find any news other than oil was up again. Did I miss something?

08-15-2007, 01:01 PM
I believe the current sentiment on Wall Street and at the Fed is the economy may be slowing down because of the housing slowdown and the sub prime mortgage meltdown. Of course airlines are very susceptible to a slowing economy. All the insiders at AMR have dumped a lot of their shares; a sign of things to come? Also, it doesn't help that the DOW is off it's high by nearly 1000 points in the last week. JMHO, why CAL in particular? of the legacies they seem to be the only ones adding capacity in the face of an economic slowdown.

Bucking Bar
08-15-2007, 01:42 PM
Tropical storm Dean? Possible fuel price spike?

I don't get it. How does Countrywide Mortgage warn of bankruptcy and still DAL and CAL drop more precipitously?

08-15-2007, 01:56 PM
As they say, in an economic downturn the airlines are the first to go and the last to recover.

08-15-2007, 02:12 PM
Well, in a word: the American consumer, not CountryWide Mort. Because 80% of airline revenue comes from 10% of the passengers, i.e. those who can pay $500 or more for a tix and not worry financially, that leaves the rest of the revenue ($89 specials) at risk. So when Homer and Gomer, used to paying $89 to visit Aunt Marge in El Paso default on their mortagage, they don't fly anymore.