Airline stocks raise demand concerns, as economical as possible “soft patches”

U.S. airline stocks fell to lows on Tuesday from the second half of last year after data showed some economic concerns.

The move comes after President Donald Trump imposes new tariffs on Mexico and Canada and raises tariffs on Chinese goods, and takes action filled with a retaliatory plan. Some executives including the head of Best Buy and targetwarned that tariffs could mean higher prices for consumers.

United AirlinesUS airlines have been most exposed to China, down about 6%. Delta Air Lines. American Airlines During domestically-focused careers, the day fell nearly 4%. JetBlue Airways Losed nearly 6% Allegiant Air Over 9%, extremely low cost carriers Frontier Airlines Finished at more than 4% lower.

Airlines, particularly full-service airlines with large international networks, have been a bright spot to mitigate strong demand and domestic flight growth, but some analysts have anticipated the impact of potential demand, especially for more price-sensitive customers ahead of the spring travel season.

The US Department of Commerce said last week that U.S. consumer spending fell for the first time in January, the first time in nearly two years. At the beginning of February, the retail sales report a month ago showed a larger drop than expected.

“We continue to make the supply background constructive, which we believe is still favorable, but our attention is shifting to what appears to be an emerging economic “soft patch,” Deutsche Bank said in a memo on Tuesday. “However, we believe that the extent and duration of the period are not clear at this time is likely to be compliant with the demands of air travel, particularly the national discretionary segment.”

The bank said it did not see any signs of vulnerability in businesses or long-distance international travel.

“The business is really robust,” United Airlines CFO Mike Leskinen told Barclays industry conference last month. “International leisure is very powerful. Domestic leisure is fine. That’s fine. That’s what we expected.”

Leskinen said government travel, which accounts for about 2% of United’s revenue, has “fallen” since Trump took office after government layoffs and other cost-cutting measures.

The Delta “sees softness” in domestic demand last month in the last month of government travel, slow weather, a fatal American Airlines regional jet crash in January, and a Delta crash landing in Toronto last month, Raymond James said in a memo on Tuesday.

However, career spring break bookings were as strong as the short-term international demand for travel, particularly in the US Europe, Raymond James said following a meeting with Delta’s head of network planning and revenue.