Decline in Discount Airline Stocks Raises Concerns About Future Prospects
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Travel Demand Holds Strong Despite Challenges
Travel demand remains strong, but cracks are showing at certain carriers. In the recently completed first quarter, travel demand held up surprisingly well, countering investor fears that rising inflation and energy prices would eat into big-ticket purchases like airfares. But cracks are forming in individual names.
Airline-Specific Turbulence
- Frontier Group Holdings (NASDAQ: ULCC) fell 25.5% in April
- Southwest Airlines (NYSE: LUV) and JetBlue Airways (NASDAQ: JBLU) were down 23.5% and 11.1%, respectively
Company-specific challenges have put certain stocks in a holding pattern, casting doubt on the sector's recovery trajectory.