By Dean Seal

Airline stocks unwound a good chunk of the marketwide rally they enjoyed Wednesday after President Trump placed a 90-day pause on tariffs, as the reality of unsteady demand trends set in.

Shares of Delta Air Lines slid 6.6% to $41.33 in early trading, while shares of United Airlines Holdings fell 7.2% to $65.72. Southwest Airlines stock dropped 5.6% to $26.96 and American Airlines Group shares dropped 8.6%% to $10.16. Shares of Alaska Air Group were down 6.5% at $47.01. JetBlue Airways shares slipped 8.9% to $3.91 and Frontier Group Holdings moved 7% lower to $3.80.

The sector's shares had come under pressure in recent weeks after Trump started launching erratic, broad and sky-high tariffs on the U.S.'s major trading partners.

After the president partially reversed course on Wednesday afternoon, airline stocks finished the day with double-digit percentage gains.

That seems to have given the market time to digest a warning from Delta on Wednesday morning that the demand environment has gotten choppy as the tariff turmoil worries consumers.

Delta said it has already seen a softening in main cabin ticket sales and that stalling corporate confidence has weakened business travel growth.

"Consumers remain cautious and corporate travel trends are choppy," Delta President Glen Hauenstein said on a call with analysts.

The entire airline industry is clearly under considerable pressure, TD Cowen analysts said in a research note Thursday morning.

The analysts think Delta is positioned more favorably than its peers given its revenue diversity, as premium revenue is continuing to outgrow main cabin. In particular, the challenging industry dynamics will likely weigh most on low-cost airlines, they said.

Write to Dean Seal at dean.seal@wsj.com

(END) Dow Jones Newswires

April 10, 2025 09:56 ET (13:56 GMT)

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