“Uncertainty” was the word that captured the latest round of airline earnings. Carriers scrapped their 2025 forecasts and said they would cut capacity in response to declining consumer confidence spurred by the Trump administration’s economic policies.
Delta Air Lines and United Airlines continued to be the most profitable in the pack, with both saying that demand for premium and international travel has not weakened.
However, American Airlines, Alaska Airlines, Southwest Airlines and JetBlue all posted losses for the first quarter, and softening domestic demand could further dampen their bottom line this year.
Some CEOs were critical of President Donald Trump’s policies — namely, the tariffs — while others struck a softer tone. Delta CEO Ed Bastian said during a call with analysts April 9 that he was “hopeful that sanity will prevail and we’ll move through this period of time on the global trade front relatively quickly.”
Southwest CEO Bob Jordan said the airline industry was already facing a recession.
“I don’t care if you call it a recession or not, in this industry that’s a recession,” Jordan told Bloomberg, adding that demand for domestic leisure travel dropped more than he’d ever seen outside the pandemic.
However, United CEO Scott Kirby was more positive on the Trump administration’s economic policies.
“Let’s take a breath, and we’ll work these things out,” Kirby said during a call with analysts on April 16.
Here are four takeaways from airlines’ first-quarter earnings.
1. Premium Is Even More Important
Premium demand was perhaps the most important theme from earnings season, with airlines banking even more on high-spend travelers to offset weak domestic and main cabin demand.
“So far, we’ve seen no deterioration in high-end consumers’ willingness to purchase a premium experience,” United chief commercial officer Andrew Nocella said. “We attribute this to the fact that the economic uncertainty has a larger impact on more budget-minded discretionary travelers than those seeking a premium experience.”
The Chicago-based carrier also announced a slate of new international routes and recently reopened its high-end Polaris lounge at O’Hare International Airport, featuring a 50% larger space.
Alaska Airlines CEO Ben Minicucci said the company was continuing to invest in upgrading its airport lounges and premium cabins despite the current economic landscape.
“We know that delivering a seamless end-to-end premium travel experience is a key differentiator, and we’re fully committed to investing in every aspect of it, from our lobbies and lounges to premium cabins, food and beverage and onboard service,” Minicucci said.
Andrew Harrison, Alaska’s chief commercial officer, said premium revenues were up 10% in the first quarter and made up 34% of the Seattle-based carrier’s total revenue.
American CEO Robert Isom said the company would be investing more in its premium product. Recently, the carrier announced that it would start offering free Wi-Fi in 2026 as part of a wider effort to revamp its commercial strategy.
“We do believe no matter the economic environment that customers will want to be treated better,” Isom said. “They will want services and amenities that they are certainly willing to pay for.”
2. International Is Also Strong, Despite Some Signs of Weakness
Similar to premium, demand for international travel also stayed strong during the first quarter, but it’s unclear if that high demand will last.
Inbound travel to the U.S. — particularly from Canada — has declined significantly. Delta president Glen Hauenstein said the carrier had seen a “significant drop-off” in bookings from Canada.
Nocella said bookings from Canada decreased 9% during the first quarter. Bookings from Europe also slid 6%.
However, demand for international travel from the U.S. is still strong — both Delta and United noted an uptick in international revenues, largely driven by U.S.-based travelers. American also said it expected long-haul international to outperform this year.
Hauenstein noted that Baby Boomers were fueling the high demand.
“There’s only so much time to go to Europe or almost so much time to go to Australia or Japan and so you’ve got this wealth effect where the cohort of retirees is wealthier than any other cohort even with the most recent rundown and they want to go do things,” Hauenstein said.
3. Expect Cheaper Domestic Fares
As a result of weaker domestic demand, airfares for domestic travel are starting to fall. Airlines have too many domestic seats and are now paring back capacity to make up for the loss in demand.
“Nobody really relishes uncertainty when they’re talking about what they could do on a vacation and spend hard-earned dollars,” Isom said.
United said it would trim its domestic schedule by 4% for the third quarter.
Jordan said during a call with analysts that Southwest was “being proactive and further reducing capacity in the second half of the year.”
“We are making these changes quickly to capture as many cost savings as possible,” Jordan said.
4. Airlines Want to Avoid Tariff Impact
Airlines had mixed responses on how they would respond to tariffs. Bastian said Delta would not accept an aircraft with a tariff.
“We hope that this issue will be resolved through the trade discussions as compared to actions that either Delta or Airbus have to take,” Bastian said.
Kirby said he did not expect tariffs would affect United’s ability to grow, noting that most of its Airbus deliveries would come from the plane maker’s factory in Mobile, Alabama.
“We view this as an opportunity to kind of work with Airbus,” Kirby said. “Again, we have much less exposure, so it’s easier for us to work with them. We’re not going to — we don’t need to make any definitive statements about what we will or won’t do at this moment in time.”
Isom said he would prefer if American did not have to pay tariffs on Airbus deliveries, adding that the airline does have deliveries slated for the end of the year that could be subjected to tariffs.
“So first off, aircraft cost too much already,” he said. “I don’t want to pay any more for aircraft. It doesn’t make sense.”
Airlines Sector Stock Index Performance Year-to-Date
What am I looking at? The performance of airline sector stocks within the ST200. The index includes companies publicly traded across global markets including network carriers, low-cost carriers, and other related companies.
The Skift Travel 200 (ST200) combines the financial performance of nearly 200 travel companies worth more than a trillion dollars into a single number. See more airlines sector financial performance.
Read the full methodology behind the Skift Travel 200.
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