Delta Stock Falls as International Travel Drops

Airline trims outlook on year after 3 percent dip in international flights.
4:41 | 09/03/14

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Transcript for Delta Stock Falls as International Travel Drops
I'm Michelle Franzen -- New York as the financial markets close on Wall Street for this Wednesday this story stuck. And one stuck with the story today delta airline's shares to the jetliner taking -- died today after -- lowered its third quarter revenue forecast. And explain what exactly is going on with delta I'm joined by Jeff MacKey from Yahoo! finance Jeff. Alum Michelle I doing -- so good not leave the unfriendly skies for the former northwest today now delta. They came out with a figure -- -- them which is passenger revenue per available seat mile. That was lower than expect on the growth side for doubt about sent the stock plummeting note this is -- nickel on every order is downward trend. What I -- -- this is that this is in the context of a stock that's up 40% year to date so a lot of things have been going very. Very right for the airlines we talked about a before they've gotten so much better at monetizing all these seat miles. And so really he had two things going one page -- just a tiny bit domestically but also there's a big international had wanted to 1%. Out of again this widely watched weird Akron -- -- -- And so international that took 1% Ottoman if you're talking about a two to 4% growth range -- -- take about a two to 3% as an international and suddenly your stock -- an air pocket. So give us an idea is this industry why. It it is industrywide -- -- -- you know -- it's this is one of those days where we're kind of look for reasons take profits on some stocks and the airline sector. Has been absolutely on fire it was where good money went to die for a hundred years Orville and Wilbur Wright actually never made a lot of money off airlines no one had cents -- tell about five years ago. When -- finally figured out how to charge everyone on board for for everything from leg room to weigh one dollar movie. But so it it's we've had a huge -- the Sox were due for a little bit of a pullback and this was -- pretty good reason internationally. You know you can't you don't have just one -- airport going to another airport you've got this entire era -- this network of international flights and one ripple in Lisbon can cause all kinds of problems at JFK so how much did today's news hurt delta stock break it down for us that two days. -- costs are 5% to guess about 5% so we took us down below big round number at forty and and that's always unpleasant we try to find support there is traders are little superstitious against you want about forty -- -- early September. And then want to give up the goes on big round numbers they get all kinda crazy about it and so it was a 5% in basic day today. I'm not so sure that people will run away from these things again the earnings power is true graphic and you have so when he nonbelievers. Myself included I used to was famous for saying people still call me to myself saying that job. Basically any -- markets opens -- -- -- airline stocks so that hasn't been true for awhile but most people are still buying the dips on these names gonna take awhile to shake out the true believers. In the meantime you're gonna have incremental buying the dips but it's just hard to find a very strong case for a look at the undiscovered gem industry that has quintupled over the last four years. All right see you mentioned airlines have been -- -- legroom and they found a way to charge baggage fees does the lowered revenue forecast though mean. The prices will be going up for the average passenger. Well prices have been kind of sneaky don't want -- -- it's never rent cheaper actually get from point a to point B. As consumers we've proven that really will -- will complain and -- pretty much just get on board because all we care about -- price. Up and tell about a week ago when all of a sudden reclining your seat became cause for fisticuffs. Now we've had in the last week eight days now. We've had three different flights out of had to be bite diverted because flights just there was a rockets -- on -- and -- Frederick -- intercede that's a result. What the airlines have done a little subtle game where they've -- taken somebody. Space in between that was negligible to get -- Squeezed. All the receipts clothes and gather and then stopped extra Roseanne and create more revenue for that's kept fares in general low orbit and end up paying for things like being able -- -- yourself comparably for the course of the four hour flight. So it it's -- -- love of a backlash the airlines have some explaining to do. We've certainly Friday -- as we reached out to airlines all day just to say you know gosh to the people on board seem upset about this whole no -- idea -- -- -- They don't wanna talk about it yet they're gonna have to minimize -- come on board on some such a good mood rather than wait -- later. All this before we head into the holiday travel season stepped back and Yahoo! finance thanks for joining us. Even watching stories stocks it with abcnews.com. For your latest headlines I'm Michelle Franzen in New York.

This transcript has been automatically generated and may not be 100% accurate.

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