Demand for air travel has plummeted due to the coronavirus pandemic and is unlikely to recover while the virus remains a threat, according to Argus.
All airlines are facing a range of risks, including fuel price volatility, labor negotiations and fare wars, Staszak said in the notes.
Referring to United Airlines, the analyst pointed out that the company was facing soft demand even before the coronavirus outbreak, due to the U.S.-China trade war and slower economic growth in the Asian nation.
United Airlines is also facing pressure due to the 737 MAX grounding and rising pilot compensation costs, Staszak said. He reduced the earnings estimates for 2020 and 2021 from $13.25 to $11.10 per share and from $14.10 to $13.20 per share, respectively.
Regarding Delta Air Lines, Staszak mentioned that the company was affected by the suspension of all flights to and from China through April 30. It's also reducing flights on other international and domestic routes.
The analyst reduced the earnings estimates for 2020 and 2021 from $7.78 to $6.70 per share and from $7.80 to $7.10 per share, respectively.