Airline stocks broadly tumbled Tuesday after Delta and American lowered their outlooks. Meanwhile, Southwest announced new incentives and updated its buyback program while JetBlue boosted its EBIT guidance.
Delta Air Lines late Monday cut its guidance for its Q1 2025 results. The airline now expects 3% to 4% revenue growth for its March-ending quarter. That's down from its January forecast for a 7% to 9% increase.
The outlook has been hit by recent declines in consumer and corporate confidence thanks to greater macroeconomic uncertainty. That has been driving softness in domestic demand, Delta said in a filing with the Securities and Exchange Commission. Growth trends for Delta's premium, international and loyalty revenue are still consistent with expectations, according to the airline.
Delta now expects an operating margin of 4%-5%, compared to its initial guidance for 6%-8%.
The airline lowered its earnings forecast to 30-50 cents per share. In January, Delta expected earnings to range from 70 cents to $1 per share.
Prior to Delta's Monday update, FactSet analysts expected Q1 earnings of 82 cents per share on 7.6% revenue growth.
American Airlines
American Airlines on Tuesday said the revenue environment has been weaker than initially expected due to softness in the domestic leisure segment, particularly in March. The company has also been impacted by the Flight 5342 collision in January over the Potomac River, which resulted in 67 deaths.
American now expects flat revenue for the first quarter, down from its previous outlook for 3% to 5% growth. The airline lowered its earnings guidance and now expects a loss between 60 cents and 80 cents per share. In January, American expected a loss of 20 cents to 40 cents.
Southwest
Elsewhere, Southwest Airlines on Tuesday cut its forecast for its revenue per available seat mile, and now expects 2% to 4% growth. Southwest previously expected 5% to 7% growth.
The airline lowered the outlook for its cost per available seat mile to about 6% growth, from its prior range for a 7% to 9% increase. Southwest estimates its fuel cost per gallon will range from $2.35 to $2.45. It previously expected fuel to cost $2.50 to $2.60 per gallon.
Southwest noted it has made progress on previously announced initiatives, such as assigned seating and extra legroom, which are on track to begin operating in Q1 2026. The company also launched its first redeye flights last month. Other recent initiatives include new interline agreements with Icelandair as well as an amended co-brand agreement with Chase for cardholder benefits. Southwest is pursuing additional airline partnerships, according to the SEC filing.
The airline also revealed some upcoming initiatives that should drive revenue.
Southwest plans to introduce bag fees for most fare products, including a "first bag free" offer for tier customers and co-brand cardmembers. The company is optimizing redemption rates for low- and high-demand flights as part of its loyalty program.
Southwest announced that beginning this spring, flight credits will expire in one year or earlier depending on the fare type. Previously, flight credits did not expire. Southwest is also introducing a basic economy class to incentivize upgrades. The airline is also looking for additional cost-effective partnerships with online travel agencies, after launching a partnership with Expedia in February.
JetBlue
JetBlue Airways on Tuesday reported that it faced more weather-related disruptions in the first two months of 2025 compared to the same period last year. The company in a SEC filing also said it is experiencing demand choppiness due to mixed macroeconomic indicators, which has resulted in trough period revenue performing below expectations for Q1. JetBlue initiated a targeted capacity reduction for March and April, which focuses on adjustments on off-peak days during the week.
The company now expects a 4% to 5% decline in available seat miles from last year, compared for its previous guidance for a 2% to 5% decline.
JetBlue lowered capital expenditure outlook to about $215 million from around $270 million.
The airline also provided an update on its JetForward initiative, and is targeting $800 million to $900 million in incremental earnings before interest and taxes (EBIT) through 2027. JetBlue expects to deliver about $200 million in incremental EBIT for 2025.
Delta Stock, American Dive
DAL stock tumbled 7.3% on Tuesday.
Delta stock is down about 23% in 2025, MarketSurge charts show. Shares are down more than 33% from their Jan. 22 record high of 69.98.
American Airlines fell 8.3%. Shares are down 34% in 2025 having unraveled from its late-January record of 19.10.
United Airlines traded 2% lower Tuesday, adding to its 22% decline this year. UAL stock also hit a record high on Jan. 22 of 116.
JBLU stock swung about 4% higher Tuesday. Still, shares are down almost 27% in 2025.
Southwest shares popped 8.3% to buck the broader selloff and rebound above their 200-day moving average.
Travel stocks have broadly sold off in recent weeks as concerns surrounding tariffs and slowing economic growth could hamper demand.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
