Shares in U.S. airlines have dropped 16 percent over the last month and a speedy turnaround looks unlikely, as the industry's fledgling recovery falters.

While airline shares could get a lift from third-quarter earnings -- which some analysts expect to look strong compared to a year ago, when a security scare kept travelers at bay -- softening travel demand, high fuel prices, and unions demanding wage increases are expected to create more turbulence for the volatile industry.

"The whole industry's a sell," said Roger King, an analyst with research firm CreditSights. "All the drivers that we had for the last couple years have petered out, and now we're talking about negative drivers."

Airline shares, which are typically owned by short-term investors like hedge funds, have been hit harder than most amid the stock market's recent slump.

Over the last month, the Standard & Poor's 500 index is down 9 percent, compared to the Amex airline index's 18 percent fall. Since hitting a three-year high in January, the airline sector has tumbled 36 percent, compared to S&P's 2 percent fall.

FALLING FARES

The domestic U.S. airline market, which began to recover a year ago from the slump following the September 11, 2001 attacks, has felt the brunt of the softening market.

Domestic air fares over the Labor Day holiday -- the last busy travel weekend of the summer -- are down 1.2 percent compared to last Labor Day, according to Amy Ziff, editor at large at travel Web site Travelocity.