At the end of last year, airline executives claimed that 2025 would be their highest-flying year yet. But as pilots (and investors) know, conditions can change fast.
American Airlines, Southwest Airlines, and Alaska Airlines have all pulled their full-year guidance over the past two days due to questions around how President Trump’s tariffs will impact their businesses. Delta Air Lines was the first to make that move when it reported earnings at the beginning of April, citing tariff-induced market chaos.
United Airlines, on the other hand, took a different approach when the airline reported earnings last week, providing two different forecasts—one for a normal economy, one for a recession— due to the difficulty of predicting what will happen next.
It’s not just airlines that are feeling the pain of poor visibility—other corners of the travel and tourism industry are getting slammed by a slowdown in consumer spending and tariff anxiety. The Dow Jones US Hotels Index has declined 13.11% this year, while the Dow Jones Airlines Index has plummeted nearly 29% in 2025.
A bumpy ride
American Airlines rose 3.11% today, despite telling investors it doesn't know enough to make a fair projection about what the rest of the year will look like. Even with the tariff cloud hanging over the company, its quarterly loss was lower than analysts expected.
CEO Robert Isom also rejected the idea of absorbing the costs of tariffs altogether, saying bluntly on the earnings call, “Aircraft cost too much already and I don’t want to pay any more.” Replace “aircraft” with “eggs,” and he’s just saying what we’re all thinking.
Southwest Airlines went as far as to announce it’s cutting flights this year—following in the footsteps of Delta and United—due to the aforementioned macroeconomic uncertainty. The company also projects its unit revenue, or revenue per available seat, to be anywhere from flat to down 4% in Q2. But shares still rose 3.68% regardless.
Yesterday, Alaska Airlines also handed investors bleak news: It expects a 6% hit to revenue in the second quarter, and said it's seeing slowing demand for travel. Shares plunged 10.29% today.
Looks like the seatbelt sign just went on for airline investors.—LB
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