NEW YORK (AP) -- Airline stocks fell Tuesday after Delta said government spending cuts hurt bookings, meaning that revenue didn't grow as much as the company expected last month.
Shares of all the big U.S. airlines dropped as well.
Delta cited several issues to explain why March passenger revenue was up only 2 percent, versus an earlier prediction for as much as 5.5 percent, including fewer last-minute, full-price bookings because of automatic government spending cuts. The airline also struggled with new technology that helps it decide how much to charge for tickets.
Buckingham Research analyst Daniel McKenzie found a silver lining in Delta's news, and raised his price target for Delta to $21 per share, from $19. He noted that Delta is cutting its flying capacity at its Tokyo hub because of the weak yen, and it is also cutting flying to Italy and Greece. He also noted that competition from Southwest is shrinking in Atlanta, Delta's biggest hub.
Delta shares fell $1.13, or 7 percent, to $15.12 in afternoon trading.
Investors may be figuring that the same government spending cuts that hurt Delta will hurt other airlines, too. United shares were down 97 cents, or 3.1 percent, to $30. Last week, United Continental Holdings Inc. said that first-quarter passenger revenue would rise, but it also said that costs would increase more than expected. The news from United prompted some analysts to cut their ratings on the stock.
US Airways Group Inc. fell 56 cents, or 3.3 percent, to $16.11. Southwest Airlines Co. fell 48 cents, or 3.6 percent, to $12.75, and JetBlue Airways Corp. was down 24 cents, or 3.6 percent, to $6.50. Alaska Air Group Inc. fell $3.17, or 5 percent, to $60.43.
The only gainers among U.S. airlines were Spirit Airlines Inc., up 13 cents to $24.74, and Republic Airways Holdings Inc., up 6 cents to $10.51.
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