Airline stocks dropped Wednesday, in part due to industry data that showed an accelerating drop in international business travel.
Premium-priced fares are airlines’ bread and butter, making up for below-cost sales to leisure and economy-class travelers. Fewer business travelers means carriers will have to fight for them, raising potential for fare cuts and slower revenue growth.
According to the International Air Transport Association, business- and first-class ticket buyers fell 8% in September from a year ago, far deeper than the decline of 1.5% seen during August. The sharpest decline occurred in the Middle East with a 14% slump, while business travel of the North Atlantic slipped 2%.
