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Airline stocks slide as Delta warns on margin pressures

Prashanth Perumal
Delta Airlines

(REUTERS/Lucas Jackson)
Delta Airlines lowered its performance estimates for the first half of 2017, expecting margins to come under pressure from higher costs and lower per-unit revenues.

The company expected its operating margin to be 10-11% in the first quarter of 2017, which is 6-7% lower than during the same period last year, according to a Form 8-K filing on Monday.

"Market fuel prices are tracking up about 55% for the quarter, which is expected to be the greatest year-on-year increase in 2017," the filing noted. "Unit revenues are tracking at the low-end of our original guidance range given a moderate pace of improvement in February than expected than initially anticipated."

The effect of Delta's lower guidance was seen across the sector, with other airline stocks (likely to be hit by the same cost and price pressures) witnessing a significant sell-off on Monday.

Here's a look at the sector's performance as of 11:11 a.m. ET:

Delta Air Lines

(Markets Insider)

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