While not making a full return to pre-pandemic prices, one can say that United Airlines (NASDAQ:UAL) stock was flying high until recently.

Like other airline stocks, shares in this legacy carrier bounced back sharply in late 2020 and early 2021. At first it seemed as if investors were prematurely pricing-in a recovery.

But as the “revenge travel” trend took shape, those early movers back into the stock were correct.

United reported very strong fiscal results during 2022. While shares experienced some turbulence in 2022, these results helped the stock climb to even higher prices earlier this year.

However, since July, UAL (like other airline stocks) has nosedived in price, for a variety of reasons.

With this, is it time to make an emergency exit, or is this latest turbulence a buying opportunity? Let’s find out.

UAL Stock and its Recent Performance

United Airlines and its peers may have had many tailwinds on their side from 2021 to 2023, but for the past three months it’s been a plethora of headwinds that’s been top of mind among investors.

At first, it was the prospect of higher labor costs that placed UAL stock on a downward trajectory. As you may recall, during the summer, United’s pilots went on strike. They resolved the strike in mid-July. That’s when the airline and the Air Line Pilots Association union ratified a new labor contract.

This four-year contract provides immediate wage increases of between 13.8% and 18.7%, with wages set to rise by 34.5% to 40.2% by the end of the contract term. However, while spiking labor costs may have set the sell-off in motion, it’s been the spike in jet fuel prices that has really served as an accelerant.

Shares really plunged in price, right after United announced early last month that its fuel costs have increased by 20% in recent months. Dropping a total of 28% since the sell-off began, the question now is where the stock is headed from here.

Keep Your Seatbelts On

After a bumpy ride from mid-summer into the fall, does UAL stock have a hot of cruising back to a higher altitude, or, at the very least, enter a holding pattern? It’s debatable. Yes, it may not seem as if the likely impact of higher fuel and labor costs is already baked into United’s valuation.

After all, the stock now trades for only four times estimated earnings for 2023. This low multiple suggests that the reporting of slightly better-than-feared results could lead to a sharp rebound for the stock.

This discounted valuation notwithstanding though, I wouldn’t discount the odds of the upcoming earnings release (scheduled for Oct. 17) eliciting a negative response among investors.

In the above warning about fuel prices, United did not provide any update to its earnings guidance for the September quarter. The impact of higher fuel prices could be even greater than the market is currently expecting.

Even if results live up to/exceed scaled-back expectations, guidance for the current quarter may give investors justification to sell rather than buy post-earnings.

Keep your seatbelts on. There’s a strong chance of further turbulence in the coming weeks. Perhaps, the months ahead as well.

‘Watch and Wait’ Before Hopping Aboard

Beyond current headwinds, there are also many potential headwinds that could severely affect UAL’s performance from here. For instance, as a Seeking Alpha commentator has argued, falling inflation-adjusted household incomes and spending trends point to falling demand for air travel. Bid farewell to the “revenge travel” tailwind.

The commentator also pointed out that much of the debt United Airlines took on to ride out the pandemic came with variable interest rates. This points to rising interest expenses, as rates climb higher.

Atop these emerging concerns, per Louis Navellier and the InvestorPlace Research Staff, airlines (United included) are increasing capacity. This is already putting downward pressure on fares, and is likely to continue doing so if demand is starting to drop.

With these headwinds in mind, which could keep shares in nosedive mode, consider it best to “watch and wait” with UAL stock for now.

On the date of publication, Thomas Niel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.