US Airline Carriers Face Near-Term Headwinds Due to ‘Macro Uncertainty,’ Insiders Say

An American Airlines plane taxis as a Delta Air Lines aircraft lands at Reagan National Airport in Arlington, Va., on Jan. 24, 2022. Joshua Roberts/Reuters

The travel industry’s post-pandemic recovery could face headwinds as the nation’s Big Three airlines—Delta, United, American—and several smaller carriers lowered their first-quarter earnings outlook due to “macro uncertainty” in the global economy, analysts and industry insiders say.

Delta Airlines presented its revised March outlook, previously provided on Jan. 10, during the highly watched J.P. Morgan Industrial Conference in New York City on March 11. During the conference, Delta CEO Ed Bastian told investors the industry was facing temporary disruption due to weaker travel demand.

“I haven’t seen how the other airlines are doing, but my guess is that everyone is experiencing some flavor of this,” Bastian said. “It is a period of time where [the] first quarter is always the most volatile quarter of the year.”

For the first quarter of 2025, Delta cut its earlier earnings forecast range from $0.70–1.00 per share to $0.30–50. Also, the company expects to deliver first-quarter revenue gains of 3–4 percent compared to a year ago, down from 7–9 percent projections.

Following Delta’s revised outlook, Southwest Airlines CEO Bob Jordan updated the Dallas carrier’s new customer-focused initiative to return to profitability. In a March 11 webcast at the J.P. Morgan conference on Wall Street, the company lowered its first-quarter revenue growth forecast to 2–4 percent, compared to the previous expectation of 5–7 percent.

“As evidence by recent actions and what we'll be covering today, Southwest is evolving very rapidly to meet our current and future customer needs, boost revenues, drive efficiency and reduce costs, and accelerate the return target that we laid out last September,” Jordan told investors.

Likewise, American Airlines CEO Robert Isom also lowered the Fort Worth, Texas-based carrier’s first-quarter outlook, mainly due to the fatal air crash between one of its passenger jets and a  U.S. Army Black Hawk helicopter at the Ronald Reagan Airport in Washington, D.C., two months ago that killed all 67 people aboard.

In the first quarter, American expects flat revenue growth through the end of March, down from its previous growth forecast of 3–5 percent. The airline also cut its first-quarter earnings forecast and expects a loss between $0.60–0.80 per share, compared to a loss of $0.20–0.40 in the previous estimates.

In his J.P. Morgan presentation, Esom said the company is going through its most challenging period since he has been with American Airlines over the past three decades. “I have been in the business [for] 30 years; and there has been a lot that has gone on over those 30 years, but I can tell you that from a leadership perspective, there has been nothing more difficult than this quarter,” stated Esom, mentioning the tragic Flight 5342 accident. “This has been the primary focus of attention for American, certainly since the end of January.”

Esom noted that the National Transportation Safety Board (NTSB) released its preliminary report into the aircraft collision involving the Jan. 29 accident on Tuesday. The report includes an accounting of facts and does not contain any analysis or determination of probable cause into the accident, said Esom, noting that the NTSB’s investigation will continue with a public board meeting in the coming months, followed by the NTSB’s final report.

Among the other largest carriers besides Delta and American, United Airlines also revised its first-quarter outlook at the Wall Street investor conference. The company’s revised outlook expects earnings of $0.75–1.00 per share, compared to the previous forecast of $0.75–1.25.

In his 35-minute presentation, United Airlines’s CEO Scott Kirby said he does not believe the industry is headed for a prolonged downturn. He said that uncertainty involving President Donald Trump’s tariffs, Federal Aviation Administration (FAA) challenges with air traffic controllers, and rising supply-chain costs have riled the industry in the short term.

“I think that the near-term economic pressures will likely accelerate [unprofitability] and we will see another really sizable drop in capacity as we move past the summer peak and the second half of August,” Kirby said.

Following the revised industry outlooks earlier this week, shares of American, Delta, United, Southwest, JetBlue Airways, and other smaller carriers are down broadly on Wall Street through March 13. Delta shares, for example, declined $0.53, to $44.77 in the early session on March 13 on the New York Stock Exchange, down nearly 16 percent from the closing price of $53.28 on March 7.

In a research note highlighting the industry’s revised outlook, Bank of America analyst Andrew Didora revised his first-quarter earnings guidance and yearly price targets for all of the nation’s top carriers, including American, United, Delta, and JetBlue.

“Based on airline commentary, February was weak with demand in March bouncing along the bottom,” Didora told The Epoch Times via email. “As macro uncertainty improves, we expect airline demand can rebound as well.”