American Airlines (AAL) stock took a nosedive in pre-market trading on Friday, plummeting 6.21% as investors reacted to a pessimistic outlook for the airline industry. The sharp decline comes as analysts warn of multiple challenges facing airlines, including slower growth prospects, inflationary pressures, and potential shifts in U.S. trade policies.

According to a research note from TD Cowen analysts Tom Fitzgerald and Helane Becker, the airline sector is bracing for significant disruptions to its competitive environment. The analysts highlight concerns about "slower growth, higher inflation, and a more isolationist approach by the US" as key factors that could negatively impact airline stocks in the near term.

With first-quarter results due later this month, investors are closely watching for guidance on the second quarter and full-year 2025 performance. TD Cowen analysts expect management teams across the industry to provide conservative guidance, noting that their own projections for Q2 metrics fall below consensus for every U.S. airline. This cautious outlook appears to be weighing heavily on American Airlines' stock, as investors adjust their expectations for the company's future performance in light of these industry-wide challenges.