Six Airline Stocks Cut at Cowen

The video discusses the downgrades of airline stocks due to anticipated margin compression from rising fuel and labor costs. It highlights the impact of these costs on earnings and the potential for market reactions. The discussion includes macroeconomic factors affecting the airline industry, such as oil prices and structural changes. The video also explores the potential for airlines to regain pricing power with lower capacity growth and higher costs.

What is the primary reason for the expected decline in airline margins in 2017?

• Decreased demand for air travel

• New government regulations

• Higher fuel and labor costs

• Increased competition

Under what condition might the analysts consider reversing their stock rating?

• If fuel prices decrease significantly

• If the airline industry introduces new routes

• If there is a significant exogenous event

• If the stock prices increase by 50%

What is one of the macroeconomic factors discussed that affects the airline industry?

• Exchange rates

• Interest rates

• Oil prices

• Inflation rates

How did airlines distribute the savings from reduced fuel costs?

• Kept all savings for profit

• Reduced ticket prices and increased wages

• Expanded international routes

• Invested in new aircraft

When is the airline industry expected to regain some pricing power?

• Not expected to regain pricing power

• Mid-year 2017

• Early 2018

• By the end of 2017