Another warning of economic recession in the United States: Many airlines' stock prices are being bloodbath, with sharp cuts to profit forecasts.

Recently, the stock market aviation sector has been facing continuous turbulence. Following Delta Air Lines, Inc. (DAL.US) releasing a profit warning statement on Monday, more companies like American Airlines Group Inc. joined in on Tuesday, also lowering their profit expectations, citing increasing economic uncertainty leading to a decrease in corporate and consumer spending. These airlines also warned that recent economic pressures would require the industry to further reduce capacity after the peak summer travel season, in order to avoid any pricing pressure. Stock prices are plummeting and prospects are bleak Concerns about travel spending have led to a significant decline in airline stocks, with selling accelerating on Tuesday. Delta Air Lines, Inc.'s stock has already dropped by 29% in the past month, and on Tuesday during midday trading, it fell by 8% and closed down 7.25%. United Airlines (UAL.US) has seen a 28% decline in stock prices since February 10th, with another 5% drop on Tuesday, closing down 2.01%, while American Airlines Group Inc. (AAL.US) saw a continuous decline, closing down 8.32% on Tuesday. Southwest Airlines Co.'s stock price, on the other hand, rose by 7% against the trend. This company had previously cancelled its iconic free checked bag policy to increase revenue. Under pressure from activist investor Elliott Management Corporation (currently its largest shareholder), the company cancelled its free baggage policy that had been in place since its founding over fifty years ago. Additionally, the company announced last month that it would cut 15% of its company positions, approximately 1750 jobs, marking the first involuntary layoffs in its history. The airline sector index within the S&P 500 has dropped by 23% over the past month, as opposed to the broader S&P 500 index, which has fallen by about 8%. The recent earnings reports from airline companies have also been concerning, as many have downgraded their profit expectations, indicating a pessimistic outlook for the industry. On Monday, Delta Air Lines, Inc. halved its profit forecast for the first quarter, citing a weakening demand for domestic travel in the United States. On Tuesday, American Airlines Group Inc. expected an even larger loss in the first quarter, due to the anticipated significant slowdown in revenue. Southwest Airlines Co. also lowered its revenue expectations for the first quarter, attributing it to reduced government travel and the significant impact of California wildfires. United Airlines stated that its first quarter profit is expected to be at the lower end of the previously forecasted range, as government-related ticket bookings have declined by 50%. The airline also said that reduced government spending has had a ripple effect on the domestic leisure travel market. Compared to a month ago, these downward revisions are starkly different. A month ago, the industry had limited capacity and strong consumer demand, enhancing the pricing power of airlines, leading to a prosperous outlook. Economic worries threaten confidence in the airline industry The threat of tariffs imposed by President Donald Trump, the possibility of further tax increases, and growing concerns about rising prices have weakened consumer and business confidence in the United States. The closely watched GDPNow tracking model by the Atlanta Federal Reserve Bank shows that the U.S. economy may have contracted in the first three months of this year. Investors and analysts suggest that since travel spending is closely linked to overall economic activity, an economic downturn could spell trouble for the airline industry. Since Trump returned to the White House, government spending cuts have impacted airlines' revenue from government sources. Robert Isom, CEO of American Airlines Group Inc., stated at a JPMorgan industry conference, "Economic uncertainty is a big issue." Isom and Ed Bastian, CEO of Delta Air Lines, Inc., also mentioned that recent air disasters and weather events have also been factors affecting travel demand. Taking proactive measures for self-preservation Airlines have indicated that bookings for high-end and long-haul international travel remain strong, and they also noted that falling fuel prices would help alleviate the pressure of slowing demand. However, they are taking additional measures to protect profit margins. Delta Air Lines, Inc. has adjusted its booking strategy. American Airlines Group Inc. has adjusted capacity in the Washington area due to reduced government-related bookings, which had been one of its most profitable markets. United Airlines has cut capacity in government and transborder markets, and plans to cancel overnight flights. The airline has also retired 21 aircraft early in order to save on maintenance costs. Scott Kirby, CEO of United Airlines, said at the JPMorgan conference, "The airline industry is evolving in a direction where people are looking at their comparative advantages. As we face what looks to be a more difficult economic period ahead, we will accelerate this process."