FORT WORTH, Texas—Airline stocks tumbled Wednesday after American Airlines issued a lackluster outlook that appeared to amplify fears that travel demand, which has surged for the past year, could finally be slowing in the face of inflation and economic uncertainty.
American said that it expects to report a small profit for the first quarter, but one that could easily be below Wall Street expectations.
American indicated that demand is still about as strong as it predicted in January, but the stay-the-course update came as analysts cautioned investors about a slowdown in travel bookings.
Bank of America analyst Andrew Didora said this week that his bank’s data shows that airline bookings have slowed since mid-March, “and we have become a bit more cautious on 2Q23 revenues.” He lowered second-quarter revenue estimates for the big airlines by up to 2 percent….