Begin with the fact that they've suffered a huge blow to their business in terms of lost revenue, having been shut down for most of last week. Moreover, there is a confidence issue among travelers that will take time and effort to restore. The impact is on a scale that is difficult to fathom, with estimates of lost revenue in the billions of dollars. Some airlines are on the brink of bankruptcy, even the biggest carriers are thought to have a very short lifespan without major assistance from the federal government. That's because airlines are very dependent on cash flow.
Airlines have massive fixed costs for labor, fuel, and equipment.
That's why an aid package from the government is on its way, though details are far from certain. Transportation Secretary Norm Mineta said he hopes to have a package in place by next week and it will likely include compensation for lost revenues from last week's nationwide shutdown. Yet issues like exemption from excise and fuel taxes are running into some opposition in Congress, so the final size and shape of this package may prove to be pivotal. Even in these times when we are galvanized as a nation, few pragmatic investors are comfortable depending on speedy passage of legislation to ensure the ongoing viability of an industry.