Shares of airline holding company IAG and technology solutions firm Amadeus fell by 5% on Tuesday. The downward trend was triggered by the plunge of Delta Air Lines’ stock, which dropped as much as 11% on the New York Stock Exchange.
By 11:00 AM, IAG shares were leading losses in the Ibex 35, dropping 5.45% to €3.48 per share. Meanwhile, Amadeus shares fell 4.55%, trading at €70.06 per share.
Impact Despite Positive Analyst Ratings
IAG’s decline came despite a boost from RBC Capital Markets analysts, who on Monday reiterated their “overweight” rating on the company, which owns Iberia, Vueling, British Airways, and Aer Lingus. Additionally, the Canadian firm raised its price target to €5.238 per share, implying a potential 37% upside from last Friday’s closing price.
Delta Airlines Sparks Market Fears
The airline sector’s downturn followed Delta Airlines’ announcement of a revenue forecast cut for the first quarter. The U.S. carrier cited weakening consumer confidence and growing macroeconomic uncertainty as reasons for the revision.
Initially, Delta projected annual revenue growth of 7% to 9%, but it has now lowered expectations to a range of 3% to 4%. Its earnings per share outlook has also dropped significantly, from an initial estimate of up to $1 per share (€0.92) to a new range of just $0.30 to $0.50.
Ripple Effect on Other Airlines
The sharp decline in Delta’s stock has also impacted other European airlines. Lufthansa’s shares dropped 2%, EasyJet fell 1.3%, and Ryanair slid 0.7%.
The airline sector remains under pressure in financial markets, as concerns grow over consumer spending trends and the broader economic outlook.
