What?! You mean China might only grow 6% instead of 7?!A great reason to sell everything today. Picked up some tech names, bio, and oil stocks on the dump. The market will have to readjust to lower growth, but I don't expect LF for airlines to suddenly drop as a result. I'll be making one last buy on this if it dips to 9.50. That's my downside scenario as I suspect it may touch that level of support.
As for sustainable profits, We're talking about a race to the bottom between jet fuel prices and RASM. In the Grand scheme of things RASM is being offset by ancillary fees and jet fuel costs and we're talking about a RASM decline of well less than 10% for the industry as a whole. I'm betting when jet fuel costs go up so will surcharges. I suspect at some point net profit tops out as inevitably jet fuel will rise, however profit is profit, and the industry at some point will find a bottom for pricing power.