Travel Stocks Take Pounding
NEW YORK (AP) -- With bankruptcies looming after last week's terrorists attacks, airlines and travel-related companies were punished Monday on Wall Street and three U.S. carriers responded by laying off a total of 14,500 employees.
After markets closed, US Airways Group said it would lay off 11,000 employees, America West Holdings said it will eliminate 2,000 jobs and American Trans Air said it will let go of 1,500 employees.
The industry is lobbying for a $20 billion federal bailout, having lost $1 billion already because of weak demand from nervous travelers, a costly two-day shutdown of the nation's air system and higher security-related expenses.
"The entire U.S. aviation system is in jeopardy," Stephen Wolf, US Airways chairman said in a statement.
An industry group said Monday as many as 100,000 layoffs are likely in coming weeks. Major carriers have already trimmed schedules by at least 20 percent and laid off more than 26,000 workers, including Monday's cuts.
The airlines' woes reverberated throughout the travel industry as shares of hotel, rental car and electronic ticketing companies became mired in the selloff.
Analysts say airlines are the most vulnerable over the long term.
"We do not believe every airline's survival is guaranteed under any circumstances," said Jim Higgins, analyst at Credit Suisse First Boston in New York. Higgins said the industry will lose at least $5 billion this year.
Continental laid off 12,000 employees, more than one-fifth of its work force, over the weekend.
American Airlines, the nation's largest airline, will announce layoffs later this week, a company official said on condition of anonymity. The exact number of layoffs will partly depend on the size of the federal bailout, the official said.
Shares of AMR, the parent of American, plummeted $11.62, or 39 percent, to $18.08 on the New York Stock Exchange. Shares of UAL, which owns United, dropped $12.90, or 42 percent, to $17.92 on the NYSE, where Delta plunged $16.74, or 44 percent, to $20.51 a share.
US Airways Group fell $6.05, or 52 percent, to $5.57, also on the NYSE. It announced the layoffs after the close of trading.
Electronic reservation firm Sabre's stock fell $15.54, or 39 percent, to $23.89 on the NYSE and rival Galileo International's stock tumbled $8.57, or 30 percent, to $20.03.
Online travel agencies trading on the Nasdaq Stock Market also were affected. Travelocity.com shares dropped $9.52, or 43 percent, to $12. …