The airline industry's already tricky attempt to navigate away from its pandemic-era lows is facing fresh headwinds, and investors are reacting by heading for the emergency exits. Shares of Hawaiian Holdings (NASDAQ: HA), Frontier Group Holdings (NASDAQ: ULCC), JetBlue Airways (NASDAQ: JBLU), and American Airlines Group (NASDAQ: AAL) both traded down as much as 5% on Tuesday, and shares of Delta Air Lines (NYSE: DAL) and United Airlines Holdings (NASDAQ: UAL) weren't far behind, as the market reacted to the latest risks facing the sector.

It has been a difficult few years for airline investors. The pandemic caused travel demand to evaporate, and efforts to return to profitability this year as demand has returned have been complicated by higher fuel and labor costs.

The latest question facing investors is whether demand will hold up should the economy fall into a recession. Markets were deep in the red on Tuesday after the August inflation data came in hotter than expected, raising new concerns the Federal Reserve would be forced to act aggressively to cool the economy and could push the U.S. into a recession.

Continue reading

Source Fool.com