Ask Matt: What’s wrong with airline stocks?

Q: What’s wrong with airline stocks?

A: Airline stocks were flying high between 2013 and 2014 - but the gains have since plateaued. Many of the factors powering the gains - tight capacity and pricing power - are priced into the stocks and going the other way.

Much of the easy money has been made already by airline-stock investors - who are now facing the risk of higher fuel costs and tougher competition. The U.S. Global Jets exchange-traded fund (JETS) is down 2.6% this year as investors figure they can get better returns elsewhere.

Jet Blue (JBLU) highlights how many of the positive trends for airlines are well-known and factored in already - subjecting investors to the risk things might not be as lucrative going forward as they have been. During May, the company’s revenue per available seat mile - a key measure of demand measured by fares paid - fell 7% even as traffic rose 10.7%. The discount airline Friday cut its expectation for growth in revenue per available seat mile for 2016 - due to lowering its capacity to carry travelers - to be between 8% and 9.5%, down from previous guidance of between 8.5% and 10.5%. Many of the top carriers had been boosting capacity, but now that trend is reversing.

Paste BN markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com or on Twitter @mattkrantz.