Airline stocks lose year-to-date gains as industry 'divergence' emerges

Airline stocks are going through some turbulent times. US carriers like American Airlines, United, and JetBlue are sputtering into Q4 after losing their gains from the first half of the year — when shares were flying high on "revenge travel." Even Delta, the only major airline in the green for the year, has come down from its summer peak. And among those names, US airlines that offer international routes are faring better than their domestic counterparts. "The tide has shifted," Chris Raite, sector analyst at Third Bridge, told Yahoo Finance. "We are seeing a divergence. International travel is a lot more profitable, so it gives them a bit more leeway to be competitive." The US Global Jets ETF (JETS), which tracks a range of airline operators and manufacturers, is down 30% over the last three months. The index's almost 30% rally in the first half of the year has been wiped out. Q3 results shows the industry is facing choppiness amid labor negotiations and higher jet fuel costs. On Thursday United stock sank 9% after the major carrier cut its forecast, citing the impact of flight disruptions to Tel Aviv amid the Israel-Hamas war and higher fuel costs. "Fuel remains volatile and worked against us in the quarter. Our average fuel price for the quarter ended $0.30 higher than the midpoint of our July expectation and more than accounts for the entirety of the reduced outlook for the third quarter," Michael Leskinen, CFO of United, said during the company's earnings call. Costlier jet fuel is no real surprise to Wall Street after the air carriers released warnings last month of impacts to their bottom lines. Delta CEO Ed Bastian reminded analysts during the carrier's earnings call in October that "since raising full-year guidance over the summer, our revenue outlook has improved, though earnings and cash flow have been impacted by higher fuel and maintenance costs."<br/>