The sector’s latest drop is surpassing a broad market swoon as investors weigh the chances of a recession and just how aggressive the Federal Reserve will get to tamp down the sharpest increase in consumer prices since the early 1980s.
American Airlines dropped 8.6% on Thursday, hitting the lowest price since November 2020. Southwest Airlines fell 6%, hitting a nearly two-year low. Delta Air Lines and United Airlines each shed more than 7%, while the NYSE Arca Airline Index, which tracks 18 carriers, lost more than 8%.
On Wednesday, the Federal Reserve lifted interest rates by three-quarters of percentage point, the biggest increase since 1994, in an effort to tame inflation.
“If you’ve flown on a plane lately, planes are very full and plane tickets are very expensive,” Federal Reserve Chairman Jerome Powell said Wednesday.