Delta Drags Airlines Down (DAL, UAL, LCC, LUV, JBLU, ALK)

Delta Air Lines Co. (NYSE: DAL) reported May traffic numbers this morning and the results have been dragging down sector stocks. Here’s the root of the problem:

While lower than recent guidance by one point, May’s performance is strong when viewed in the context of an exceptional May performance in 2011. The variance to recent guidance is due primarily to the impact from competitor fare actions in the second half of the month. Delta expects strong peak season revenue performance.

United Continental Holdings Inc. (NYSE: UAL) is down -7.8% at $22.46 in a 52-week range of $15.51-$25.84. US Airways Group Inc. (NYSE: LCC) is down -10% at $11.38 in a 52-week range of $3.96-$13.36. Southwest Airlines Co. (NYSE: LUV) is down -2% at $8.76 in a 52-week range of $7.15-$11.65. JetBlue Airways Corp. (NASDAQ: JBLU) is down -5.3% at $4.88 in a 52-week range of $3.40-$6.32, and Alaska Air Group Inc. (NYSE: ALK) is down -4.3% at $32.36 in a 52-week range of $25.55-$39.77.

Delta’s fuel cost in May was $3.37/gallon, including a mark-to-market adjustment of -$2.41/gallon for hedges recorded in periods other than May. In April Delta reported a fuel cost of $3.44/gallon, which included a mark-to-market adjustment of +$0.41/gallon.

Delta’s shares are down -10.2% at $10.34 in a 52-week range of $6.41-$12.45.

Paul Ausick