By Denny Jacob
Economic uncertainty is creating turbulence for airline stocks as concerns about demand for domestic air travel loom.
"Our attention has shifted to what appears to be an emerging economic 'soft patch," said analysts at Deutsche Bank Research as they downgraded JetBlue Airways and Frontier Group Holdings on Tuesday. "To what extent and duration are not clear at the present, however, we do think it will likely weigh on demand for air travel, particularly the domestic discretionary segment."
Shares of JetBlue are down about 7.5% at $5.98, while Frontier retreated 5.6% to $6.55. United Airlines tumbled 7.2% to $85.09, while Delta Air Lines declined 6.5% to $54.68. American Airlines edged down 5.1% to $13.17.
The analysts say consumers could hold off on travel and certain purchases as President Trump enacts policies that are expected to raise prices.
Full-service carriers are better positioned to weather the effects of trade actions, say the analysts, who maintain their buy ratings on American, Delta and United. Price targets for Frontier Group, parent company of Frontier Airlines, and JetBlue were lowered as the analysts see economic uncertainty having a disproportionate impact on low-cost and ultra-low-cost carriers.
Write to Denny Jacob at denny.jacob@wsj.com
(END) Dow Jones Newswires
March 04, 2025 12:18 ET (17:18 GMT)
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