airport departures

What’s going on?

Three of America’s biggest airlines warned last week that a rise in coronavirus cases will impact profits this winter, but you should subscribe to their podcast to hear what they really think.

What does this mean?

The Delta variant has been on the rise in the States, and it looks like it’s putting everyone off their hard-earned vacations: United Airlines, American Airlines, and Southwest Airlines have all cut their revenue forecasts for the rest of the year. The writing, it seems, is on the bathroom wall, with reservations on the decline and cancelations on the rise in August. That lower demand means airlines are planning to put fewer planes in the air during the festive season. That’s not to say no one’s traveling, mind you: it’s just that the airline’s most profitable customers – business and international travellers – are still MIA.

Why should I care?

For markets: Deutsche Bank gets vertigo.
America’s airlines might be down in the dumps, but America’s stocks are plenty airborne for the both of them. They’re so high, in fact, that Deutsche Bank is the latest of the investment banks to warn that a selloff’s imminent. Stock valuations, after all, have risen non-stop for the past seven months to hit historic highs, even as the Delta variant runs riot and government support runs away.

The bigger picture: Relatable problems.
Don’t you hate it when all your passengers cancel their flights just as the price of jet fuel collapses: China announced on Friday that it’d be selling oil from its reserves to the global market – a supply-boosting move that could lower raw material costs and, by extension, fuel costs for airlines. The decision stands to reason: it comes as one measure of inflation in the country surged to a 13-year high, putting pressure on manufacturers in the world’s biggest exporter.

For information purposes only, not intended to constitute financial advice from us. The customer should assess the risk of  potential loss carefully and individually before investing in any financial products. Dabbl Group Limited is authorised by the FCA under the reference numbers 767263 as an appointed representative of its Principal firm VIBHS Financial Ltd, which is authorised and regulated by the Financial Conduct Authority under the reference number 613381.

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