From Yahoo Finance: 2025-05-07 06:07:00

U.S. airlines are struggling as travel demand drops due to Trump’s trade war. Budget carriers like Southwest, Frontier, and JetBlue are hit hardest, while Delta and United maintain margins. Premium travel demand is rising, benefiting full-service airlines. Low-cost carriers are slashing capacity to protect margins, facing profitability challenges post-pandemic.

Full-service airlines like Delta and United are focusing on premium travel and customer loyalty programs to attract high-value travelers. Premium revenue accounts for a significant portion of passenger revenue for Delta. Bank of America data shows spending from higher-income households is growing, indicating a lasting shift towards premium travel.

Budget airlines are trying to tap into high-end travel, but full-service airlines dominate the market with their premium offerings. Despite strong demand for long-haul international flights, most airlines are losing money domestically. A shortage of wide-body jets may keep fares high, benefiting legacy airlines.

Legacy airlines like Delta and United are leveraging their vast international networks and premium offerings to attract high-value travelers. Revenue from loyalty credit-card programs is significant, with Delta earning a large portion of its passenger revenue from credit-card remuneration. Full-service airlines are focusing on customer loyalty to drive revenue.

Budget airlines are struggling to turn a profit post-pandemic. Southwest, once resilient during downturns, is facing financial challenges. Operating expenses are rising, leading to policy changes that may impact customer loyalty. Frontier and Spirit also face profitability challenges, with Frontier’s CEO arguing that excess supply of seats is the issue, not the business model.

Read more: Low-cost carriers hit hardest by US travel demand slump