Airlines are under heavy selling pressure with oil in triple digits; asks about airlines being 'naked' in this crisis.
speaker1
David Nelson
US airlines are completely unhedged, abandoned hedges when oil was cheap; American Airlines is most exposed with $36B debt and no hedges.
David Nelson
If oil stays above $100 through summer, real potential demand destruction.
Asks if oil alone will weigh on travel bull market given strong recent earnings.
speaker1
David Nelson
Geopolitical conflict is Achilles heel of travel industry; always comes unexpectedly; jet fuel jumped from $2.50 to over $4/gallon recently.
Asks about European/Asia Pacific airlines and contagion effect.
speaker1
David Nelson
When investors sell a group, they sell everything; Strait of Hormuz is critical 21-mile waterway; de-escalation seems difficult.
Asks how this differs from past conflicts/energy shocks.
speaker1
David Nelson
Iran's military degraded; no off-ramp seems available; until resolved, travel industry won't find its feet.