Why Airline Stocks Are Falling Again Today
Investor fears about the state of the economy continued to weigh on Wall Street on Friday, pushing the Dow Jones Industrial Average to a 2022 low. Airline stocks continue to underperform the overall market, with shares of United Airlines Holdings (NASDAQ: UAL), American Airlines Group (NASDAQ: AAL), Delta Air Lines (NYSE: DAL), JetBlue Airways (NASDAQ: JBLU), and Frontier Group Holdings (NASDAQ: ULCC) all down as much as 5%, and stocks including Southwest Airlines (NYSE: LUV) and Alaska Air Group (NYSE: ALK) down more than 3% apiece.
The Federal Reserve pushed rates higher again this week, and it appears Chairman Jerome Powell's message to markets about the group's commitment to getting inflation under control is being received. Stocks have been under pressure due to fears that the Fed's fight will push the U.S. economy into a recession.
For airline stocks, the threat of a recession is just the latest in a steady stream of challenges facing the industry. The pandemic brought global travel to halt, depressing airline revenues and forcing the companies to scramble to cut costs and raise capital. The industry saw demand recover in 2022, boosting revenue, but higher labor and fuel costs, coupled with a shortage of qualified flight crews, has limited the impact of those higher-revenue numbers on the bottom line.
Source Fool.com
