Airline rivals caught in United's turbulence

Airline stocks went into a nosedive Wednesday on investor fears that a plan by United to grow rapidly will undercut prices and profits. Shares of United Continental Holdings plunged 11.4% to $69.05. American, Delta and Southwest also fell sharply. The largest six US airlines lost more than $9b in stock-market value. United was the nation's biggest airline a decade ago but has slipped behind American and Delta. United executives say they have to rebuild service on routes that the airline abandoned to regain high-paying connecting passengers. Investors fear that United's plan — on top of growth by other airlines — will flood the market with too many flights and seats, triggering ruinous fare wars to keep planes full. After the market closed on Tuesday, United reported solid financial results for Q4. Profit jumped 46% to $580m, beating Wall Street's expectations. The airline indicated that average prices are heading higher, which cheered investors. In after-hours trading, the company's stock went into a tailspin, however, midway through a meeting with Wall Street analysts that was webcast for investors everywhere to hear. It marks the fourth consecutive stock slump for United following an earnings report. In October, a disastrous conference call contributed to a 12% one-day drop. The breaking point this time was United's disclosure that it plans to add between 4 and 6% to its passenger-carrying capacity this year and maintain that pace through 2020.<br/>