Airline Outlook Dims Despite Record Summer Travel

Delta Air Lines is set to kick off U.S. airlines’ second-quarter earnings season on July 10, and the industry is bracing for mixed results. While record numbers of travelers are taking to the skies this summer, ticket prices are falling, and demand hasn’t met earlier expectations. Domestic airfare is averaging $265 for a round-trip, the lowest since 2021, and down 3% from last year, according to Hopper.

Southwest Airlines CEO Bob Jordan acknowledged the shift, calling this season “on sale,” signaling widespread fare reductions. Airlines, including Delta, American, and Alaska, have already pulled their 2025 forecasts due to ongoing economic uncertainty, including potential trade policy shifts and weakening inbound international travel.

Despite the July 4 travel surge—expected to see over 18.5 million travelers screened by the TSA between Tuesday and Monday—airlines are facing tepid overall demand. Bank of America data shows air travel spending dropped 11.8% in June compared to last year, marking a sixth consecutive month of year-over-year declines.

In response, airlines plan to trim unprofitable flights, especially during off-peak periods following the summer season. Most carriers generate the bulk of their profits in Q2 and Q3, but a slow rebound in leisure and corporate demand has tempered expectations.

Even international markets, once a bright spot, are seeing fare drops. Flights to Europe now average $817, down nearly $100 from last year, while Asia-bound fares average $1,328, a 13% decline year-over-year. As earnings season begins, investors will look for signs of recovery and any signals of deeper capacity cuts in the second half of 2025.

Sources: AirGuide Business airguide.info, bing.com, cnbc.com