Several major US airlines have dialed quarterly financial expectations as the industry competes for softer demand from economic uncertainties and other factors.
Southwest, the US and Delta were among the airlines announcing changes to guidance.
Southwest says revenue per available seat miles is expected to increase by 2-4% in the first quarter, lower forecasts than the 5-7% growth it previously forecast.
“The points of the near-low unit revenue guide compared to the company's previous estimates are primarily due to higher than expected completion factors, reduced government travel, and greater impacts from California wildfires than initial estimates.”
Multiple wildfires in the Los Angeles area were furious in early January, with the largest flames of over 23,700 acres before firefighters could house them.
“The rest of the decline is primarily due to softness in reservation and demand trends, as the macro environment has weakened,” Southwest said.
Meanwhile, American Airlines said its first quarter “revenue environment is weaker than initially expected.”
A military helicopter and American Airlines Flight 5342 collided in the air near Ronald Reagan Washington National Airport in the Washington DC area in late January.
All 64 people on the plane and three individuals, a helicopter, were killed.
In light of these factors, the airline said it expects “nearly flat” gross revenue for the first three months of this year, compared to last quarter.
Previously, we expected an increase of 3-5%.
Also, according to SEC filing, the expected quarterly adjusted loss range per diluted stock has been changed from $0.20-0.40 to $0.60-0.80.
Delta is expected to drive a decline in quarter total revenue growth, with a 3-4% increase rather than the 7-9% growth expected when it issued its previous guidance in mid-January.
“The outlook has been affected by the recent decline in consumer and business trust caused by increased macro uncertainty, driving softness in domestic demand,” Delta said. “Premium, international and loyalty revenue growth is consistent with expectations and reflects Delta's diversified revenue-based resilience.”
The three airlines have released guidance updates ahead of their presentation at the JPMorgan Industrials Conference.
They also raise concerns about whether the US could fall into a recession, and uncertainty caused by tariff liquidity has increased in recent weeks, putting pressure on both American consumers and businesses.
Southwest hired approximately 175.5 million empanens in 2024. In the same year, Americans won 226.4 million, while Delta reported more than 200 million.
