Should Airline Investors Fear Delta's Forecast?

Delta's grounded forecast is tempering the enthusiasm of airline investors.
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Delta Air Lines (DAL) - Get Report stock's delayed takeoff into 2019 is seemingly indicative of an overall slowdown for airline stocks.

Shares of the Atlanta-based air carrier, the second largest in America, have slid modestly in early morning trading Tuesday as the market deals with a mixed earnings release, stung by a worse-than-expected forecast for first quarter 2019.

"2018 was a successful year for Delta with record operational reliability, increasing customer satisfaction, and solid financial results in the face of higher fuel costs," said CEO Ed Bastian. "As we move into 2019, we expect to drive double-digit earnings growth through higher revenues, maintaining a cost trajectory below inflation, and the modest benefit from lower fuel costs."

However, Delta disappointed with its first-quarter 2019 guidance, touting earnings between $0.70 and $0.90 per share and an adjusted total revenue per available seat mile, or TRASM, growth rate of 2%. Both figures came up short of analyst expectations.

The tempered forecast follows a guidance slash American Airlines (AAL) - Get Report  and skittishness around Jet Blue's (JBLU) - Get Report outlook only last week that saw its sock plunge over 10%.

As the government shutdown adds pain to the potentially slower space, to the tune of $25 million per month according to Delta CEO Ed Bastian, there could be more turbulence ahead for the short term.

For more on how to play the lower-altitude stocks in the space like Delta over both the short and long haul, check out Real Money's Stock of the Day coverage.