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 caution about the rest of the year a꧒mid 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官方开奖结果体彩网:charge baggage fees or assign c𓂃ustomers seats, has weighed on sales, Jordan said.
“A lot of that is, I think, the consumer reaction to the tariffsℱ," 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官方开奖结果体彩网:offered "bimodal" guidance that accounted for the possibility of a recession, while Delta 澳洲幸运5官方开奖结果体彩网:declined to affirm its projections for the year ahead.)
Southwest on Wednesday 澳洲幸运5官方开奖结果体彩网:pulled its annual targets for 2025 and 2026 and announced plans to "proactively" reduce capacity. Domestic travel is a bigger par♛t of Southwest’s business than its competitors, it said in a🦋 press release.
Some Demand Is 'Sitting On the Sidelines'
American (AAL) 澳洲幸运5官🔜方开奖结果体彩网:als💜o withdrew its full-year guidance on Thursday. The company cited weak domestic sales, particularly in the main cabin and from third-party online travel sites—of🐻ten used to comparison-shop—on an earnings conference call Thursday. (Executives estimate a fatal crash in Jཧanuary was responsible for $200 million of the $473 million loss last quarter, but they no longer anticipate 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官方开奖结果体彩网:on the sidelines waiting to understand which direction the ඣeconomy is going.𓂃”
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官方开奖𒊎结果体彩网:behaving as if they were in a rece🌠ssion. Although cheaper seats have gone unfilled, premium and international tickets 澳洲幸运5官方开奖结果体彩网:bought more often by the well-off have continued to 澳洲幸运5官方开奖结果体彩网:sell well, Delta, United and other carriers have said.