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The squeeze play is on from major airline carriers

Published 11/15/2016, 01:42 PM
The squeeze play is on from major airline carriers
LUV
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DAL
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UAL
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JETS
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  • Consolidation in the airline sector looks like it's going to be great for investors, but downright lousy for travelers.
  • Today, United Continental (UAL +3.3%) disclosed that it plans to restrict low-fare customers to a single carry-on bag and not assign their seats until the day of the departure.
  • Delta Air Lines (DAL -0.1%) announced previously similar restrictions on low fare tickets.
  • The carriers hope to upsell customers on the ability to carry on bags and select seats in advance.
  • The move by the two majors is likely to be copied across the sector or free up rivals to institute their own fee hikes. It will be interesting to see how Southwest Airline (LUV +1.7%) reacts - more fees or a marketing blitz?
  • Shares of UAL are up 13% since the election, while Delta is 11% higher.
  • Related ETF: JETS.

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