American Airlines stock plummets on warning of rising fuel, labor costs

Yahoo Finance Live discusses a drop in American Airlines stock amid fears that rising labor and fuel costs could weigh on future profits.

Video transcript

DAVE BRIGGS: Let's take a look at another mover today, one of the big laggards. American Airlines warning rising labor and fuel costs could weigh on profits in the first quarter. You can see that stock down more than 9% on the day and, really, across the board. The airlines were hurt.

United crushed more than 6%. Delta down. Southwest down. And JetBlue suffered as well-- 3.7%. Really is an interesting look at an airlines industry that has seen enormous demand and no signs it is lagging off at all as we approach the busy summer travel months.

SEANA SMITH: Yeah, exactly. It's going to be so critical here to watch those booking patterns over the next several months here because that is so important here for the airline sector. But clearly, this update here from American Airlines, taking a hit across this sector because many investors are potentially worried here about what this could signal for so many of its competitors, it will be interesting to see whether or not consumers are going to start trading down or have already started trading down to some of those lower fares.

We asked Citi analyst Steve Trent about that last hour on the program. He said that is something that he is going to be watching. There is a lot more talk about that. He's going to be keeping close tabs on those summer and spring bookings here.