- Airline stocks' slide outpaced the broader market.
- The move comes after a decline in consumer retail spending and other investor concerns.
- Airline executives have been upbeat about travel demand in 2023.
Airline stocks slid Wednesday as the market fell broadly amid concerns over stability of some banks and new data that showed a slowdown in consumer spending.
The NYSE Arca Airline index, which includes mostly U.S. carriers, was down about 6% Wednesday afternoon, on track for its biggest one-day percentage decline since last June. It outpaced a drop in 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 lead the way. Consumer appetite for air travel has surged over the past year and higher 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 potential new pilot contract and weaker-than-expected demand early this year, traditionally a slow period for travel.
Some executives said lucrative business travel is shifting because of more hybrid work models that allow customers to mix work trips with leisure in place of 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 6 a.m., you're back at 8 p.m. ... you're just not going to do that anymore."
Hayes said that means shifts in the network.
"We came in with 15 Boston-LaGuardias as we thought that was a great idea. It turns out it wasn't," he said. "And that's now going to be nine or 10 as we get later into the year."
Delta Air Lines CEO Ed Bastian said corporate travel has recovered more than 80% of prepandemic levels.
"As I tell many of my CEO friends across the industry and outside of the industry, I know where your employees are. They may not be in the office, but you can find them on my airplanes," he said at the conference. "And that's because of the new way of work, the new hybrid, new mobility. And I don't think that's changing."