A JetBlue airplane at Ronald Reagan Washington National Airport in Arlington, Virginia, on March 9, 2023.
Stefani Reynolds | AFP | Getty Images
Airline stocks slid Wednesday because the market fell broadly amid concerns over stability of some banks and recent data that showed a slowdown in consumer spending.
The NYSE Arca Airline index, which incorporates mostly U.S. carriers, was down about 6% Wednesday afternoon, on course for its biggest one-day percentage decline since last June. It outpaced a drop within the S&P 500.
Airline executives during a JPMorgan industry conference on Tuesday said they expect strong demand — and profits — in 2023, despite higher costs, with leisure travel continuing to cleared the path. Consumer appetite for air travel has surged over the past 12 months and better fares have boosted airlines’ bottom lines.
But carriers also pointed to near-term problems like higher expenses like fuel and labor. United Airlines on Monday forecast a first-quarter loss from a possible recent pilot contract and weaker-than-expected demand early this 12 months, traditionally a slow period for travel.
Some executives said lucrative business travel is shifting due to more hybrid work models that allow customers to combine work trips with leisure instead of more traditional schedules.
“I feel business travel has modified,” JetBlue Airways CEO Robin Hayes said on the conference. “Those day trips where you used to rise up at 6 a.m., you are back at 8 p.m. … you are just not going to do this anymore.”
Hayes said meaning shifts within the network.
“We got here in with 15 Boston-LaGuardias as we thought that was an incredible idea. It seems it wasn’t,” he said. “And that is now going to be nine or 10 as we get later into the 12 months.”
Delta Air Lines CEO Ed Bastian said corporate travel has recovered greater than 80% of prepandemic levels.
“As I tell lots of my CEO friends across the industry and out of doors of the industry, I do know where your employees are. They is probably not within the office, but you’ll find them on my airplanes,” he said on the conference. “And that is due to the recent way of labor, the brand new hybrid, recent mobility. And I do not think that is changing.”