Airline stocks fell in the premarket Wednesday after United Continental’s growth plans raised concern it could drive down fares.
Shares of United pulled back 6.7 percent and were the biggest decliners in the S&P 500. Delta Air Lines fell 4.6 percent, while American Airlines and Southwest Airlines declined 4.5 percent and 4.1 percent, respectively.
United said it expects to increase capacity between 4 percent and 6 percent in 2018, adding it sees a similar growth rate in 2019 and 2020. This move could impact United’s profit margins as it tries to compete with lower fares offered by competing airlines as it will have to pay to operate those flights or potentially offer competitive fares to entice passengers on board. It could also lead other airlines down a similar path.
