By Shivansh Tiwary
(Reuters) -Shares of the "Big Three" U.S. carriers slumped in premarket trading on Tuesday after disappointing forecast adjustments from Delta Air Lines ( DAL ) and American Airlines ( AAL ) sparked concerns about the impact of a slowing economy on travel demand.
Delta Air Lines fell 6.4% in premarket trading after the legacy carrier slashed its first-quarter profit forecast, while American Airlines lost 3% following expectations of a wider loss. Peer United Airlines ( UAL ) was also down 3%.
The sector-wide slump followed a broad market selloff on Monday after tariff jitters and worries of a potential federal government shutdown ignited fears that the U.S. economy could be headed towards a recession.
U.S. President Donald Trump's tariffs have raised concerns about an economic slowdown and reduced discretionary spending, prompting travelers to exercise caution when planning trips.
The abrupt shift comes as a setback for big U.S. carriers, which just two months ago were benefiting from strong travel demand and high pricing across their networks.
Major U.S. airlines are set to speak at the J.P.Morgan Industrials Conference on Tuesday and are expected to provide insight on the new demand environment and update their expectations for the current quarter.
Budget carrier Southwest Airlines also cut its forecast for unit revenue growth in the first quarter.
Citi analyst Stephen Trent said Delta's forecast cut was disappointing, but not entirely unexpected.
"Concerns about US consumer strength, possible DOGE impacts on governmental air travel demand and Federal Aviation Administration (FAA) staffing, US government tariff uncertainties and several high-profile aviation incidents across North America have all occurred since late January," Trent said in a note.
American now expects a first-quarter adjusted loss in the range of 60 cents to 80 cents per share, compared with its previous forecast for a loss of about 20 cents to 40 cents per share.
Delta had said on Monday it expects profit in the range of 30 cents to 50 cents per share, compared with its previous estimate of 70 cents to $1 per share.
