Southwest Airlines is also seeing weakening travel demand
Alaska Air Group, Inc. (NYSE:ALK), United Airlines Holdings Inc (NASDAQ:UAL), and Southwest Airlines Co (NYSE:LUV) are in focus, after each flagged higher fuel costs for the third quarter. The warning came after Saudi Arabia and Russia extended oil output cuts until the end of 2023, which sent crude prices surging.
Despite previously sporting premarket losses, ALK and UAL were last seen up 1.4% at $40.88 and 0.7% at $48.83, respectively. Nevertheless, both equities struggle with long-term overhead pressure from their 20-day trendlines, and carry substantial quarter-to-date deficits.
LUV is down 1.4% at $30.35 at last check — its lowest level since June — after the airline’s bookings for August came in at the lower end of expectations. The 20-day moving average began guiding the shares lower in late July, contributing to an 8.4% year-to-date deficit.
The options pits are already responding to these warnings. Put traders are targeting LUV, with 3,210 puts exchanged so far today — double the intraday average volume — though the January 2024 40-strike call is still the most popular. Options volume for UAL is also running at double what is typically seen at this point, with 5,547 calls and 5,035 puts traded. Most active is the weekly 9/8 49.50-strike call.