U.S. airlines are expected this month to post their ninth-consecutive year of profits, the longest stretch of good financial news the sector known for boom-and-bust cycles has had in at least four decades.

Investors have not been impressed.

The sector lagged the broader market in 2018, and 2019 hasn’t been much better. The NYSE Arca Airline Index, which tracks 15 U.S. and international carriers, dropped close to 21 percent over the last 12 months, while the S&P 500 fell nearly 7 percent in that time.

Investors battered airline stocks in recent weeks after Delta Air Lines and American Airlines warned they would miss previous revenue or profit estimates, raising questions about how airlines will fare in 2019. On Monday, Bank of America Merrill Lynch downgraded Delta to “neutral” from “buy” do to demand challenges.

Delta kicks off the reporting on Tuesday before the market opens and United Continental Holdings reports after the bell. Each of the four largest U.S. carriers are expected to post profit growth, but investors will be interested in how well airlines are equipped to handle curve balls such as the government shutdown, cheap fuel and economic weakness.

Here are some themes to watch:

The partial government shutdown that began Dec. 22 became the longest on record over the weekend. The impact is already visible in aviation. The impasse over funding for a wall along the U.S. southern border has furloughed FAA inspectors, holding up federal approval of new routes and planes. Shortages of Transportation Security Administration officers, who are not receiving regular paychecks, have been calling in sick in greater numbers, prompting at least two major airports — Miami International Airport and Houston’s George Bush Intercontinental Airport — to close some checkpoints.

The shutdown has raised questions about air carriers’ ability to follow through with scheduled events like aircraft and route launches.

Delta Air Lines scheduled a launch Jan. 31 of its brand-new Airbus A220s, a plane it’s using to court business travelers with bigger seats and windows. Also, Southwest Airlines is awaiting government approval to begin service to Hawaii.

Airlines need Federal Aviation Administration inspectors’ approval to debut new aircraft. The FAA over the weekend said it called about 500 furloughed safety inspectors back to work. FAA safety inspectors oversee and approve new aircraft, airplane maintenance and personnel like pilots and mechanics, among other areas.

“This is likely to get worse before it gets better,” wrote Helane Becker, airline analyst at Cowen & Co. “We are aware that airports are working with the airlines, the TSA and the FAA to keep the U.S. airspace open for business, but the longer this goes on, the more concerning it becomes.”

The shutdown may even hurt demand with government employees not receiving a paycheck, said Jamie Baker, airline analyst at J.P. Morgan Chase.

“Even with an imminent reopening of the government, if one has maxed out their credit cards putting food on the table, the probability of a now planning a summer vacation seems low.”

The profit-crimping rise in fuel costs sent airlines scrambling to raise revenue through higher fares and fees. Investors are now wondering how airlines will handle cheaper fuel. Lower fuel prices in the past have encouraged airlines to expand rapidly and in some cases lower fares to compete and investors are looking for growth how much airlines make per passenger.

“This is exactly why investors are apprehensive about getting involved in the group in a declining fuel environment. In the past, the airlines have competed away gains from lower fuel as they reward customers with lower fares,” wrote Cowen’s Becker. “With oil trending lower in recent months, investors are worried this time will not be different.”

Investors will be curious how quickly airlines are growing and where carriers will be adding and scrapping service this year, particularly given weaker fuel prices. American Airlines scrapped some unprofitable routes to China and cut some Latin America service, while adding flights to Europe and domestically last year.

Perhaps the biggest announcement that could come from an airline would be JetBlue Airways‘ decision on flights to Europe. The New York-based carrier has been mulling adding trans-Atlantic service to its route map for more than two years and executives have recently said they expect to use its Mint business class to lure travelers on board flights to Europe.

Originally published at CNBC

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