American Airlines shares drop 5.4%

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American Airlines ($NASDAQ:AAL)’ shares are down 5.4% on Tuesday, underperforming the market. This is likely due to a combination of factors, including the company’s high debt levels and recent reports of customer service issues. This means that American Airlines is more leveraged than its peers and may have difficulty servicing its debt in the event of a downturn.

In addition, the airline has been in the news recently for a series of customer service issues, including a passenger being forcibly removed from a flight. This negative publicity could be weighing on the stock price as well.

Share Price

On Tuesday, American Airlines stock opened at $14.4 and closed at $14.1, down by 0.5% from prior closing price of 14.2. Most media sentiment towards the company has been positive, but this 5.4% drop in stock shares is significant. It’s unclear what caused the sudden drop, but it could be due to a variety of reasons such as investor confidence, market conditions, or even something specific to American Airlines. Whatever the reason, it’s important to watch how the stock fares in the coming days to get a better sense of the situation.

VI Analysis

According to the VI app, American Airlines is a medium risk investment in terms of financial and business aspects. The app has detected 2 risk warnings in the income sheet and cashflow statement. However, the company’s fundamentals reflect its long term potential. Thus, American Airlines is a good investment choice for those looking for a medium-risk investment.

VI Peers

The airline industry in the United States is highly competitive, with American Airlines Group Inc competing against Delta Air Lines Inc, JetBlue Airways Corp, and Southwest Airlines Co. All four companies offer a variety of services and amenities to their customers, and all are striving to be the best in the industry. American Airlines Group Inc has a long history in the airline industry, dating back to 1930. The company has a fleet of over 950 aircraft and serves over 350 destinations in more than 50 countries. Delta Air Lines Inc is the second-largest airline in the world, with a fleet of over 800 aircraft and serving 325 destinations in 52 countries. JetBlue Airways Corp is a relative newcomer to the industry, having been founded in 1999, but has quickly become a major player, with a fleet of over 250 aircraft and serving 102 destinations in 28 countries. Southwest Airlines Co is the largest low-cost carrier in the United States, with a fleet of over 700 aircraft and serving 101 destinations in 40 countries.

– Delta Air Lines Inc ($NYSE:DAL)

Delta Air Lines Inc is an American airline headquartered in Atlanta, Georgia. The company operates a mainline fleet of over 800 aircraft and its regional affiliates operate over 1,000 regional aircraft. The company has a market cap of 20.63B as of 2022 and a Return on Equity of 21.65%. Delta Air Lines is one of the four major airlines in the United States and is a founding member of the SkyTeam global airline alliance. The company’s main hub is at Hartsfield-Jackson Atlanta International Airport, and it also has hubs in Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Salt Lake City, and Seattle. The company flies to over 325 destinations in 52 countries on six continents.

– JetBlue Airways Corp ($NASDAQ:JBLU)

JetBlue Airways Corp is an American low-cost airline headquartered in New York City. The company was founded in 1998 and it operates flights to destinations in the United States, the Caribbean, and Latin America. As of 2022, JetBlue Airways Corp has a market cap of 2.22B and a Return on Equity of -6.48%. The company has been struggling financially in recent years, posting losses in three of the past five years.

– Southwest Airlines Co ($NYSE:LUV)

Southwest Airlines Co is a U.S. airline headquartered in Dallas, Texas. As of 2022, it has a market cap of 19.65B and a return on equity of 10.01%. The company operates more than 4,000 flights a day and serves 99 destinations in the United States and 10 other countries. Southwest is known for its low fares and its “no frills” approach to flying.

Summary

If you’re looking for an airline stock to invest in, American Airlines may not be the best option. Shares of the company have been on a downward trend in recent months, and it doesn’t look like things will be improving anytime soon. Media sentiment towards American Airlines is mostly positive, but with the current state of the airline industry, it may be wise to wait until things stabilize before investing.