Delta Air Lines (DAL)
It’s a triple whammy for airlines. Not only do they face rising fuel costs (20% in 2017, and a forecast 30% in 2018), but they also tend to hold a large amount of debt, which means they will face significant rises in two completely unavoidable expenses. Add in slowly sinking global economic growth and it’s easy to see why wise investors should give these companies a wide berth. As it happens, Delta Air Lines owns its own refinery, but that will have only a small off-setting effect on its fuel costs. Most discouragingly, Delta has one of the worst current ratios (the ratio of assets to debt) of any airline, with a dismal 0.39.
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