The sharp decrease in the travel request related to President Donald Trump’s commercial war is to hit American airlines, but low -cost transport companies feel deeper effect, according to an in -depth report from Reuters.
SouthWest, Frontier, and Jetblue have reported a major corrosion of operating margins during the first quarter of 2025, which varies sharply with the most flexible offers by UNITED Airlines and Delta, despite the total cooling in the demand for consumers.
Analysts say that the difference stems from the high appetite for excellent air travel and the increasing importance of the loyalty of the airlines-both of the two fields, as the carriers carry the full services a clear advantage. On the other hand, budget airlines are still struggling with profitability challenges after the epidemic.
With fears of economic slowdown and inflation, it is expected that the profit gap between the two parts of the airline will expand. The dynamic is a transformation from previous contractions, when airlines such as southwest have often appeared.
“It is very similar to how the southwest used to appear stronger through retreat, and this time we basically believe the rotation of United, it’s the role of Delta,” said Jimmy Baker of Jpmorgan.
Old transport companies benefit from increasing demand for distinguished seats, as developed Delta revenues now constitute 41 % of passenger income, up from 35 % in 2019. UNITED and ALASKA also expanded their distinguished offers.
Meanwhile, budget airlines reduce the local ability to stabilize financial affairs. However, United and Delta continued to expand the roads, attracting passengers at lower prices while protecting margins through strong international demand revenues and anti -credit.
“The transformation of the excellent guidance that occurred in this industry … will be solid,” Shin Takit at Alaska told the director of the financial director of the Takit, to Reuters.
Reuters also reported that the American American American Card.
Low-income families-a major customer base for low-cost airlines-have shrunk, especially on travel. This comes at a time when the US local market is still weaker globally, while major airlines tend to have long international roads and loyalty programs to stay profitable.
“It is one thing to be able to produce a distinct seat, it’s another thing to get customer loyalty,” pointed out the President of the Delta Glin Hunstein.
It was southwest, which was superior to economic performance, is now under pressure from the high operating costs and began to reflect some of its distinctive policies, such as flying without a bra. Dallas -based clients, such as Ben Thomas, CEO of Dallas, is reviewing their loyalty.
“This change has the ability to make the travel path more expensive,” Thomas told Reuters.
Other budget airlines increase worse. SPIRIT has just came out of bankruptcy, and Frontier has published a positive operating margin once in the past five years.
However, the CEO of Frontier Barry Biffle refused the narration that budget holders are structurally deprived. He blames an increase in the supply in the local market, adding that the recession will return travelers to cheaper options.
“It is not the story of a business model,” Bever told Reuters. “It is the concentration of geography.”
