Why Airline Stocks Are Gaining Altitude Today
Stocks are flying high on Wednesday on investor hopes that inflation is moderating, lessening the risk the Federal Reserve will have to act aggressively and end up pushing the economy into a recession. Airlines, a sector that typically underperforms broader markets during a recession, are doing better than most, with shares of American Airlines Group (NASDAQ: AAL), JetBlue Airways (NASDAQ: JBLU), and United Airlines Holdings (NASDAQ: UAL) all up as much as 5% in afternoon trading.
Airline investors have flown through a lot of turbulence over the past few years. The pandemic wiped out travel demand, and airline revenue with it, and the hoped-for rally in 2022 as vacation travel bounced back has been partially stymied by higher fuel and labor costs.
The industry is slowly recovering, but it doesn't need any further headwinds. That's why the stocks have been under pressure as fears of a potential recession grew. In the event of a downturn, budget-conscious consumers and businesses are more likely to cut travel spending than they are more essential items.
Source Fool.com
