Airline stocks slide despite CEO optimism on demand outlook

Airline stocks fell on Wednesday as markets broad decline Concerns about the stability of some banks and new data showing a slowing economy expenditures.

The NYSE Arca Airline Index, which includes mostly U.S. airlines, was down about 6% Wednesday afternoon, on track for its biggest one-day percentage drop since last June.it falls over S&P 500 Index.

Airline executives told a JPMorgan industry conference on Tuesday that they expect strong demand and profits in 2023 despite higher costs, Leisure Travel Continue to lead the way.Consumer demand for air travel has soared over the past year, with higher fares boosting airlines’ earnings. the bottom line.

But the carrier also pointed to near-term problems, such as increased costs such as fuel and labor. united airlines monday forecast a first quarter loss Travel is traditionally a slow time due to potential new pilot contracts and weaker-than-expected demand early in the year.

Some executives say lucrative business travel is changing, as more hybrid work models allow clients to combine work travel with leisure, rather than more traditional schedules.

“I think business travel has changed,” JetBlue Airways CEO Robin Hayes said at the conference. “Those day trips where you used to get up at 6am and come back at 8pm … you’re not going to do that again.”

That means a shift for the network, Hayes said.

“We brought in 15 Boston-LaGuardia teams because we thought it was a good idea. It turned out it wasn’t,” he said. “As we move into later in the year, it’s going to be nine or 10 now.”

delta airlines Chief Executive Ed Bastian said corporate travel has returned to more than 80% of pre-pandemic levels.

“As I tell many of my CEO friends in and out of the industry, I know where your people are. They may not be in the office, but you can find them on my plane,” he said at the meeting. “It’s because of new ways of working, new hybrids, new mobility. I don’t think that’s going to change.”