Southwest Airlines (LUV) was the latest US airline to note that consumers are beginning to hold back on travel spending as tariffs and trade skirmishes perplex the airline industry.
“In the first quarter, we had terrific operating results,” Southwest Airlines CEO Bob Jordan told Yahoo Finance on Thursday (see video above). “We really beat our cost plan. We had good revenue results. … But we were highly impacted on the demand side by the tariffs and then just the consumer confidence erosion.”
Southwest reported first quarter earnings that beat expectations, but it pulled its full-year guidance. The stock rose 3.6% on Thursday.
According to TSA passenger data, 2025 air travel is slightly outpacing the same period in 2024, but executives monitoring booking and destination trends have been signaling caution ahead.
Since the company laid out its demand expectations in January, “the first quarter fell off about three full points, and the second quarter has fallen off about six full points compared to what we thought,” Jordan said. “So that gives you a good indication of the level of impact on demand and just how rapidly the decrease in demand fell.”
Read more: What Trump’s tariffs mean for the economy and your wallet
The Dallas-based airline operator isn’t alone in needing to navigate a moderation in consumer travel spending.
American Airlines (AAL), which also reported quarterly results on Thursday, painted a similar picture. The airline also withdrew its full-year outlook, citing “economic uncertainty.”
“I think the tariffs, the economic uncertainty that we’re going through today, unfortunately, was certainly not anticipated a couple of months ago,” Citi analyst Steve Trent told Yahoo Finance. “American, Delta, and others have strongly telegraphed that they’re not going to pay tariffs on these planes. So in terms of how long it lasts, it’s really hard to tell.”
Delta Air Lines (DAL), the first major airline to report results this earnings season, disclosed stalled revenue, pulled its full year guidance, and announced plans to activate a “defensive mode” playbook.
In a phone conversation with Yahoo Finance in early April, Delta CEO Ed Bastian said, “I think the level of uncertainty that we’re facing coming out of the global trade discussions and skirmishes is a bit unprecedented, and as a result, given the lack of clarity we have in terms of the longer-term ability to forecast revenue.”
“Our bookings are pretty good,” Bastian continued. “They have a pretty good line of sight for the next 160 to 90 days, but beyond that, it’s a bit murky.”
