Flight cancellations spilled over into Martin Luther King Jr. Day as airlines battled with freezing temperatures and heavy snow.
The sector endured a sharp selloff Friday after
Delta Air Lines
’ outlook for 2024 disappointed investors. The weekend travel disruption, which continued into Monday, is another blow for airlines and could ultimately hit first-quarter earnings.
A few days of disruption wouldn’t typically have much of an impact, but the first three months of the year are historically the weakest for U.S. airlines and travel over the Martin Luther King Jr. Day and Presidents Day weekends usually play a significant role.
Close to 3,000 flights within, into, or out of the U.S. were canceled over the weekend, according to flight-tracking website FlightAware. A further 2,674 were canceled as of 5 p.m. Eastern Time Monday.
Southwest Airlines
canceled 749 flights, or 19% of its daily schedule, by midafternoon Monday. United Airlines canceled 363 flights, or 14% of its schedule, while Alaska Airlines canceled 166 flights, or 24%. United and Alaska have canceled around 7% and 20% of their daily flights, respectively, in recent days due to the grounding of
Boeing
737 MAX 9 jets.
Houston’s Bush Intercontinental Airport was the worst-hit, with 208 outbound flights cancelled as of late afternoon Monday. That was more than a third of scheduled flights.
Travelers at Denver International Airport also suffered, with 18% of outbound and 19% of inbound flights canceled as of late afternoon Monday. At Chicago Midway International, 29% of departing flights were canceled.
Tens of millions of people across the U.S. were under a wind chill warning or advisory on Monday. The National Weather Service warned of “dangerously cold temperatures” across much of the U.S., “with new records expected to be tied or broken.”
The National Weather Service said the subzero wind chills would continue to affect much of the Rockies, Great Plains, and Midwest into Tuesday, with wind chills below 30 degrees below zero continuing to extend over Central Plains and Middle Mississippi Valley.
The governors of Mississippi and Alabama on Sunday declared states of emergency for winter weather.
On Monday night, starting at 7 p.m. local time, Iowa Republicans were to cast the first votes of the 2024 presidential election. Voters faced wind chills as low as 35 below zero.
Monday’s caucuses are expected to be the coldest since they started in 1972.
Delta stock tumbled 9% Friday after the carrier said it expected 2024 earnings to be between $6 and $7. The airline previously had a long-term target for EPS of more than $7 this year. The first earnings of the season certainly rattled investors as
United Airlines
stock fell 10.6% and
American Airlines
declined 9%.
Southwest Airlines
fell 4% and
JetBlue Airways
was down 6%.
TD Cowen analysts said Delta’s slump has created a buying opportunity for investors, in a note Friday. They reiterated their Outperform rating on the stock and price target of $49, implying 27% upside to Friday’s price.
Helane Becker wrote that management were “being conservative” with the $6 to $7 earnings-per-share range. “But there are a lot of issues that could derail results (volatile fuel prices and supply chain pressures especially) and a lot of positive surprises that would have to occur for earnings to exceed $7.”
United Airlines is next to report earnings on Jan. 22. Until then, the current disruption won’t help the sector’s first-quarter guidance.
Write to Callum Keown at [email protected]
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