Airline stocks fall as possible economic 'soft patch' raises demand concerns
U.S. airline stocks tumbled Tuesday to their lowest levels since late last year after data showed some economic concerns, hitting what had been a bright spot for consumer spending.
U.S. airline stocks tumbled Tuesday to their lowest levels since late last year after data showed some economic concerns, hitting what had been a bright spot for consumer spending.
The moves also come after President Donald Trump imposed new tariffs on Mexico and Canada and raised tariffs on Chinese goods, actions that were met with plans for retaliatory duties. Some executives, including the heads of Best Buy and Target, warned the tariffs could mean higher prices for consumers.
United Airlines, which has the most exposure to China of the U.S. airlines, fell about 6%, along with Delta Air Lines. American Airlines dropped close to 4% for the day, while domestic-focused carriers JetBlue Airways lost nearly 6%, Allegiant Air shed more than 9%, and ultra-low-cost carrier Frontier Airlines ended more than 4% lower.
Airlines, especially full-service carriers with big international networks, had been a bright spot thanks to strong demand and moderating domestic flight growth, but some analysts are now anticipating potential demand impacts, particularly for more price-sensitive customers ahead of the crucial spring travel season.
U.S. consumer spending fell in January for the first time in almost two years, the U.S. Commerce Department said last week. Earlier in February, its retail sales report from a month earlier showed a bigger-than-expected drop.
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