What happened
Airline shares tumbled again on Wednesday amid a growing number of flight cancellations and the release of dire financials. The government has pledged to help, but there is no concrete plan in place.
Shares of Hawaiian Holdings (HA), Alaska Air Group (ALK 0.98%), Delta Air Lines (DAL 0.57%), and United Airlines Holdings (UAL -1.12%) were all down more than 30% for the day in early afternoon trading, and shares of JetBlue Airways (JBLU 6.86%) and Southwest Airlines (LUV -0.58%) were both off more than 15%.
So what
By now it is well established that the airline sector has been hit hard by the COVID-19 coronavirus pandemic, with global travel demand all but evaporating as the outbreak has spread. Airlines are scrambling to cut spending by freezing hiring and trimming schedules, with JetBlue on Wednesday the latest to announce cuts and Delta saying it would ground half its fleet.
The pandemic is expected to cost the global industry more than $100 billion in lost revenue in 2020. JetBlue on Wednesday said that so far in March, it is taking in about $4 million in bookings daily, down from about $22 million daily in March 2019, while issuing more than $20 million per day in credits.

Image source: Getty Images.
Although the U.S. sector is relatively healthy compared with many international airlines, those sorts of losses can't go on forever. White House officials have expressed support for some sort of an industry backstop, with talk of upward of $50 billion in grants and loan guarantees.
But the industry has also received significant pushback from lawmakers and union leaders who see it as a bailout for companies ill prepared for bad times.
Airline stocks were placed under added pressure midday after famed investor Bill Ackman, speaking on CNBC, said he believes all airlines will stop flying and hotels will shut down before the crisis is contained. That seemingly is already being priced into Hawaiian shares after Gov. David Ige of Hawaii called for a 30-day suspension of visitors to the state.
Now what
With today's losses, all of these airlines except Southwest have lost half of their equity value over the past month, with United down 78% and Hawaiian down 72% year to date. It appears investors are bracing for multiple industry bankruptcies, and given the current situation and the outlook for further cuts, it is easy to understand why.
Airline year-to-date data by YCharts
It is worth noting that most of these airlines still have 60 days or more of liquidity or unencumbered assets that can be used as collateral for loans. But at this point, it might be up to lawmakers to create a bailout package to provide some level of stability to the stocks. The airlines came into this crisis prepared for a downturn, but the crisis has now run deeper than any airline had prepared for.
Expect the volatility to continue until there is some clarity on the reach of the pandemic, or until Washington comes forward with a plan to help.