Airlines are trading lower after Delta (DAL) cut first quarter guidance this morning: AAL -4.7%, JBLU -4.5%, UAL -4.2%, DAL -3.7%, ALK -3.0%, LUV -2.7%, HA -2.3%, ALGT -2%.
Delta lowered first quarter unit revenue growth to flat year-over-year from +0-2% . This did not come as much of a surprise. Delta was clearly lagging guidance it had given in mid-January after reporting flat February unit revenue last week.
Delta also cut its operating margin guidance to 10-11% from 11-13%. Delta said margin pressure will peak in the first quarter.
Delta reiterated that 2017 is a transition year with higher labor and fuel costs. The company continues to expect unit revenue trends improving throughout 2017.
The other domestic airlines are likely to report February traffic this week.
Here is a list of valuation metrics for the group (JETS).