The nation’s big airlines are worried about weakening demand. Here’s why ...
Have the winds suddenly shifted for U.S. air travel, or is it just some momentary turbulence?
That was the question discussed by the leaders of the country’s largest airlines as they reported weaker-than-expected performance in the first quarter at a J.P. Morgan investor conference on Tuesday.
“The business at the core is healthy,” said Ed Bastian, CEO of Delta Air Lines. “We just need to continue to better reset around demand and what we’re seeing in the environment.”
Bargain hunting: When is the best time to book flights for the cheapest airfare?
The Atlanta-based carrier cited weather, the American Airlines flight 5342 and Delta flight 4819 accidents and broader macroeconomic uncertainty for the move to halve its revenue growth forecast for the first quarter.
American, JetBlue, Southwest Airlines and United Airlines joined Delta in lowering their expectations for the first quarter. The common theme: a weak macroeconomic environment and lower consumer confidence, particularly after the AA5342 accident at Ronald Reagan Washington National Airport (DCA) in January.
Unsaid was the cause of much of that economic uncertainty. Since President Trump’s inauguration on Jan. 20, government travel spending has slowed dramatically, probationary federal employees have been laid off en mass and the administration has threatened or implemented steep tariffs on goods from China and some of the U.S.’s closest trading partners, including Canada and Mexico.
Robert Isom, CEO of American, called both the economic uncertainty and the AA5342 accident a “big deal” to the airline’s business.
American brings in about 1.5% of its revenue from government travel, a large part from its hub at DCA, said Isom. That segment of its business has seen a “big impact” from the recent government spending cuts.
“DCA, historically, has been one of our most profitable hubs and, over the long run, I am confident it will return to its full share of profitability,” he said.
In depth: Ronald Reagan Washington National Airport renumbers its gates
United has also been hit hard by the pullback in U.S. government spending thanks, in part, to its hub at Washington’s Dulles International Airport (IAD). Government-related revenue is down by about half since the beginning of the year, CEO Scott Kirby said. The segment previously made up roughly 2% of United’s global revenue.
The Chicago-based carrier is correcting for the loss in government business by retiring 21 aircraft earlier than planned and cutting some flights. The cuts include select flights to Canada, where there is a “big drop in Canadian traffic to the U.S.,” and some red-eye flying, Kirby said.
“Nothing that we have seen in the short term impacts what we think is going to be happening even a year from now,” he said.
Southwest is the third airline with a large Washington-area presence. Baltimore/Washington International Thurgood Marshall Airport (BWI) is one of its largest bases and the busiest in the region.
Bob Jordan, CEO of the Dallas-based carrier, said they broadly see “softness in bookings and demand." He did not specify how much of that was related to cuts in government travel or attributable to Southwest’s Baltimore base.
A spring break thaw?
Airlines are optimistic that the travel demand weakness in the first quarter is, as Bastian put it, “transitory.”
“We have a sense that March will be the bottom,” added the Delta CEO.
His competitors and Wall Street largely agree.
Pro tips: The biggest mistakes people make with travel rewards credit cards
JetBlue CEO Joanna Geraghty said Tuesday that, while slower days and weeks on the calendar are “under pressure,” peak travel days and periods remain strong. And she is optimistic for the upcoming spring break and summer travel periods.
"The outlook for [the second quarter is] stronger due to the greatest peak period exposure and self-help steps," wrote Raymond James analyst Savanthi Syth on Tuesday. Capacity cuts are the primary "self-help steps" she referred to, though lower fuel prices are also a boost to airline bottom lines.
TD Cowen airline analyst Tom Fitzgerald wrote earlier in March that airlines have made "substantial capacity cuts" in the U.S. domestic market since mid-2024. Domestic schedules in the April-through-June quarter are expected to increase roughly 3.5% year-over-year in 2025 compared to a 6% year-over-year jump last year, he wrote.
Caution still ruled the roost Tuesday, given that, as the industry learned at the outset of the COVID-19 pandemic in 2020, travel demand can turn on a dime.
“While booking trends for the summer currently appear stable, we have assumed a moderate level of softness in revenue trends and that continues throughout the remainder of the year,” said Southwest’s Jordan.
Related reading:
- TPG’s 2025 travel trends report
- Key travel tips you need to know — whether you're a first-time or frequent traveler
- Best travel credit cards
- Where to go in 2024: The 29 best places to travel
- 6 real-life strategies you can use when your flight is canceled or delayed
- 8 of the best credit cards for general travel purchases
TPG featured card
Rewards
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 3X | Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com. |
| 2X | Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Intro offer
Annual Fee
Recommended Credit
Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.
Rewards Rate
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 3X | Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com. |
| 2X | Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Intro Offer
You may be eligible for as high as 100,000 Membership Rewards® Points after spending $6,000 in eligible purchases on your new Card in your first 6 months of Membership. Welcome offers vary and you may not be eligible for an offer.As High As 100,000 points. Find Out Your Offer.Annual Fee
$325Recommended Credit
Credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.Excellent to Good
Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.