Southwest and American report first-quarter losses amid economic uncertainty
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U.S. airlines projected 2025 to be a strong year but are now adjusting their expectations in response to economic uncertainty and President Trump's tariffs.
Why it matters: American, Southwest and Delta say they are being cautious amid lower-than-expected leisure and business bookings in the first quarter of 2025.
- All three have decided to wait on updating their full-year outlooks, saying it's difficult to forecast the coming months.
State of play: Dallas-based Southwest Airlines reported a net loss of $149 million in the first quarter of 2025.
- Fort-Worth based American Airlines reported a net loss of $473 million. The airline said a "number of factors" offset its revenue in the first quarter, including economic uncertainty and the American Eagle crash that killed 67 people in January.
The big picture: Airlines are trying to keep the Trump administration from ending 1980s-era exemptions that have allowed Boeing, Airbus and other aerospace manufacturers to build aircraft and jet engines largely without tariffs, per the Wall Street Journal.
- "This [cost] is not something we would intend to absorb. And I'll tell you, it's not something that I would expect our customers to welcome," American Airlines CEO Robert Isom said at the airline's earnings call this week.
The intrigue: American says its revenue from international flights increased by 2% in the first quarter of 2025 compared with the first quarter of 2024.
- But foreign arrivals into major U.S. airports, including DFW Airport, tumbled in mid- to late March compared with the same time last year, indicating a sudden reluctance to visit the U.S.
Meanwhile: Southwest plans to reduce its flight capacity in the second half of this year.
- The airline will start charging for checked bags on reservations made or changed after May 28.
What's next: The 2026 FIFA Men's World Cup will bring "tremendous" interest in travel to the U.S., Isom said.
- He said he wants the U.S. to become "a more welcoming destination" and offer shorter visa processing times, visa-free travel opportunities and a more seamless travel experience.