Airline Stocks Tumble As Economic Concerns Overshadow Travel Surge - MSNBC

Excerpt from MSNBC

• Airline stocks have dropped more than the broader market.
• Spring and summer travel demand have surged despite higher fares.
• Economic concerns from inflation and recession risk have weighed on airline stock prices.

Planes are packed Airfare is sky high. Testing for international arrivals has ended. There is a lot going in airlines' favor.

The sector's latest drop surpasses a broad market decline as investors ponder the chances of a recession and how aggressive the Federal Reserve will be in trying to control consumer prices.

The lowest price for American Airlines in over a year was hit on Thursday. Southwest Airlines fell to its lowest point in two years. The airline index, which tracks 18 carriers, lost more than 8%.

The Federal Reserve raised interest rates by three-quarters of a percentage point on Wednesday in a bid to tame inflation.

The chairman of the Federal Reserve said that plane tickets are very expensive if you have recently flown on a plane.

After two years of strong travel demand, Delta, United and American are expecting a return to profitability. Travelers have been adjusting to higher fares, according to carriers executives.

The airlines have not been able to keep up with demand. In order to give themselves more wiggle room for disruptions and to address labor shortfalls, many airlines have reduced summer flying plans.

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