NEW YORK - Two recent security incidents are not expected to have much effect on airline stocks. Investors instead are likely to focus on an improving economy when trading resumes today.
Shares of airline stocks climbed out of a trough in the second half of 2009 as people began flying again and ticket prices edged up. By November, the volume of people flying was up 2 percent, compared with a year earlier, said Roger King, an analyst for CreditSights.
King said those types of trends will be more important to Wall Street than a man’s alleged attempt blow up a plane as it descended into Detroit Friday. There was another scare yesterday on the same route after a confrontation with a sick passenger, although officials said there was no security threat.
“The airline industry is constantly exposed to these types of events,’’ King said. “A failed attempt like that really doesn’t do much in terms of revenue.’’
That was Wall Street’s reaction in December 2001, after Richard Reid tried to destroy a trans-Atlantic flight with explosives hidden in his shoes. The event took place on a Saturday; shares of major airline companies barely budged when trading resumed the following Monday.
Heightened security measures can prompt louder grumbling but aren’t likely to deter passengers or send shares tumbling, analysts said. Demand from the airlines’ high-margin business travelers could be dampened, however, if new security measures make air travel significantly more onerous, said Kevin Mitchell, president of the Business Travel Coalition.
