Airline Stocks Are Falling. What Next?

With the opening of the markets Monday morning, the expected plunge in airline stocks has begun. By midday, shares of the major airlines such as AMR (AMR Quote), parent of American Airlines, United Airlines (UAL Quote) and US Airways (U Quote) are down more than 40% from where they closed last Monday.

Travel-related stocks are also taking a hit, as shares of Travelocity (TVLY Quote) are now trading down 33% and shares of Expedia (EXPE Quote) are down by 30%.

Shares in Continental Airlines (CAL Quote), which over the weekend announced schedule cutbacks and employee furloughs, are trading down 51% from their previous close. ...