Shares of American Airlines drop to nearly 20-year low
By BRAD FOSS
The Associated Press
9/19/02 6:44 PM
NEW YORK (AP) -- American Airlines' stock price plummeted on Thursday, falling to levels not seen since 1983 as trading volume soared.
The entire airline sector has been under pressure lately, but shares of American have taken an especially big hit in the past two weeks. American's stock has lost half of its value since the beginning of the month.
On Thursday, shares of AMR Corp., the carrier's parent company, fell 92 cents, or 15.8 percent, to close at $4.90 on the New York Stock Exchange.
More than 10 million shares changed hands on Thursday, compared with average trading volume of about 1.7 million shares over the past 200 days.
Shares of American's two biggest competitors, United and Delta, also fell on Thursday, albeit less severely. United's stock dropped 2 cents to $2.51 on the NYSE, where Delta's stock declined 45 cents to $12.32. Delta is trading at levels not seen since 1982.
Industry analysts said it was unclear why shares of American were falling so sharply.
It's alarming, in general, the way the whole industry is trading, said Helane Becker, an analyst at Buckingham Research Group in New York.
Becker speculated that investors might be showing displeasure with recent announcements by American to begin shuttle service on the East Coast and to add some international routes. People would rather see cost cutting, Becker said.
American spokesman Todd Burke would not comment on why the stock price was falling, other than to say: This underscores the serious financial condition of the airline industry. We are confident that we have a viable recovery plan in place and are currently in the middle of implementing it.
Talk of war with Iraq has caused investors to worry about a dropoff in international travel. Another concern is that jet fuel costs will skyrocket in the months ahead as crude oil futures are priced above $29 a barrel.
Late last week, in a filing with the Securities and Exchange Commission, the carrier forecast that jet fuel costs in January would be 16 percent higher than they were in August, when the carrier paid 77 cents per gallon.
Fuel price has trended up during the third quarter and remain(s) persistently high, the airline said in its SEC filing.