Key Takeaways
- Southwest, American and Alaska were the latest airlines to express caution about the rest of the year amid flagging demand for domestic flights.
- Domestic sales have stalled as consumers grow uneasy about tariffs, according to executives such as Southwest CEO Bob Jordan, who called the drop-off one of the worst he's seen.
- International and premium tickets, more often purchased by the affluent, have performed better, executives said.
The skies aren't looking so friendly these days.
Southwest, American and Alaska were the latest airlines to express ca🌳ution about the rest of the year amid flagging demand for domestic flights.
Southwest Airlines (LUV) CEO Bob Jordan said Thursday the drop-off in business detected in February was one the most pronounced he has seen. “That is a very rapid fall-off," he said on CNBC. "It’s probably the most that I have seen absent COVID."
The carrier believes economic unease, rather than Southwest's plans to 澳洲幸运5开奖号码历史查询:charge baggage fees or assign customers seats, has weighed on sales, Jordan ♌sa🐼id.
“A lot of that is, I think, the consumer reaction to the tariffs," he said on CNBC:𝄹 "Some of that could be front-running the tariffs in terms of spending money in other locations. So it could snap back.”
American adjusted its full-year outlook, joining other carriers—including United (UAL) and Delta (DAL)—in making similar adjustments. (United recently 澳洲幸运5开奖号码历史查询:offered "bimodal" guidance that accounted for the possibility of a recession, while Delta 澳洲幸运5开奖号码历史查询:declined to affirm its projections for the year ahead.)
Southwest on Wednesday 澳洲幸运5开奖号码历史查询:pulled its annual targets for 2025 and 2026 and announced plans to "proactively" reduce capacity. Domestic travel is a bigger part of Southwest’s business than its competitℱors, it said in a press release.
Some Demand Is 'Sitting On the Sidelines'
American (AAL) 澳洲幸运5开奖号码历史查询:also withdre♏w its full-year guidance on Thursday. The company cited weak domestic sales, particularly in the main cabin and from third-party online travel sites—often used to comparison-shop—on an earnings conference call Thursday. (Executives estimate a fatal crash in January was responsible for $200 million of the $473 million loss last quarter, but they no longer aꦐnticipate it affecting sales.)
Those are “our most price-sensitive customers,” Chief Strategy Officer Stephen Johnson said, according to a transcript made available by AlphaSense. “We’d like to think that’s demand that’s not been lost, but demand that’s 澳洲幸运5开奖号码历史查询:on the sidelines waiting ♊to understand which direction the economy is goin𒅌g.”
Alaska Air Group (ALK) declined to update its full-year forecast beyond the current quarter while releasing its first-quarter results Wednesday.
Delta CEO Ed Bastian in early April said Americans were 澳洲幸运5开奖号码历史查询:behaving as if they we🎃re in a recession. Although cheaper seats have gone unfilled, premium and international tickets 澳洲幸运5开奖号码历史查询:bought more often by the well-off have continued to 澳洲幸运5开奖号码历史查询:sell well, Delta, United and other carriers have said.