When is a window not a window? Air carriers United Airlines (UAL) and Delta Air Lines (DAL) would like to know after both stocks plunged today on reports that they are being sued by millions of passengers who did not get the window seats they had been promised.
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United Airlines was down 2.5% and Delta dropped nearly 2%.
Extra Charge
According to a report on the BBC, the airlines are facing claims that the passengers were charged extra for a window seat but found themselves sitting next to a blank wall instead.
The lawsuits, filed separately against the U.S. flyers, seek millions of dollars in damages for more than a million customers of each airline.
According to the report, the passengers said the companies did not tell them that the seats were windowless during the booking process, even when charging a premium rate.
It is understood that the lawsuits, filed by legal firm Greenabum Olbrantz, are seeking refunds of extra fees paid by the passengers who said they had paid for window seats but got windowless ones instead.
It seems that some of the seats on Boeing (BA) and Airbus (EADSF) planes do not have windows because of the positioning of air conditioning ducts or wiring. This is not flagged by Delta or United during the booking process. Lawyers believe this is a “deceptive” and “unlawful” practice.
It is understood, however, that other flyers like American Airlines (AAL) do flag this issue up to passengers.
Share Dive
This case targets some of the key risks faced by airline stocks and their investors. The ability to sell tickets to customers either because of the reputation of the airline or the state of the economy, as well as legal and regulatory matters play a huge role in determining success – see below.
It also comes at a pivotal time for United, Delta and the U.S. airline sector, which has been under huge pressure this year as a result of economic uncertainty both at home and abroad, volatile oil prices and the potential impact of Trump’s tariffs.
However, despite that United Airlines stock is up a healthy 137% in the last 12 months, with Delta soaring 47%.
One of the shining lights for airlines has been the resilience of premium travelers – both those jetting off for business or for a sunny holiday.
United unveiled a new business class suite earlier this year called ‘Polaris Studio’ for the new planes, which will have 25% larger seats, skincare kits, and a huge 27-inch, 4K OLED seatback screen – the largest among U.S. carriers.
Perhaps, with those luxuries a window seat may not seem that important after all.
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