Delta and American Airlines will be seen on July 1, 2023 at Ronald Reagan Washington National Airport in Arlington, Virginia.
Stefani Reynolds | AFP | Getty Images
Airlines are cutting quarter profit and sales estimates, warning that the weaker economic background is focused on travel demand.
Prior to the JPMorgan Industry Conference, American Airlines On Tuesday, it is expected to lose between 60 cents per share to 80 cents per share in the first three months of the year, a loss of greater than its previously forecast of 20 cents to 40 cents per share. He said revenues are likely to remain flat for the year compared to estimates of the January increase.
“They said they were weaker than initially expected, mainly due to the impact of Flight 5342 and softness in the domestic leisure segment in March.”
The predictions continued afterwards Delta Air Lines It cut its first quarter estimates after the market closed Monday. Delta said the outlook will “help soften domestic demand, impacted by the recent decline in consumers and the decline in corporate trust caused by an increase in macro uncertainty.”
In addition to leisure travel, the airline also said that since the launch of the latest Trump administration, policies such as government travel and tariffs, government layoffs and other cost-cutting have been declining sharply.
“People are cautious and are just waiting to see a little bit of the market instability that we all see, whether it’s trade and tariff challenges or changes in macroeconomic policy,” he said at the JPMorgan conference.
United Airlines CEO Scott Kirby repeated the sentiment at the same meeting.
“We’ve also seen weaknesses in the demand market,” Kirby said. Government travel accounts for around 2% of United’s business, but other workers’ travel is also affected, like consultants and contractors, accounting for an additional 2% to 3%.
“We’ve seen it bleeding from it in the domestic leisure market,” Kirby said.
One cost-saving measure: Kirby said United should spend $100 million this year early on in retirement of 21 aircraft.
Both executives were brighter with long-term trends and bright spots like long-distance international and premium travel demand.
Delta and American stocks fell more than 6% in afternoon trading. United were under 1%.
Southwest Airlines We also reduced our unit’s revenue guidance to below 4%, from our 7% forecast for the first quarter last year. The carrier also announced the end of its “two bag fly-free” policy on Tuesday, charging customers for their first checked packages since May. The stock rose 8%.
JetBlue Airways Stocks rose about 6%.
